What does microfinance mean?

Legal analysis: Micro-credit refers to micro-loans issued by individuals or enterprises. Different from traditional loans, microfinance is generally not carried out in banks, but is handled by individuals contacting relevant microfinance companies. The amount of small loans is generally 1 10,000 to 200,000 yuan. Handling small loans requires the actor to provide certain guarantees. Microfinance is popular because of its simple procedures, wide scope and more flexible repayment methods.

Legal basis: Guiding Opinions on the Pilot Project of Small Loan Companies Article 1 A small loan company is a limited liability company or a joint stock limited company established by natural persons, enterprise legal persons and other social organizations, which does not absorb public deposits and operates small loan business. A small loan company is an enterprise legal person, which has independent legal person property, enjoys legal person property rights, and bears civil liability for its debts with all its property. Shareholders of small loan companies enjoy the right to return on assets, participate in major decisions and choose managers according to law, and are liable to the company to the extent of their subscribed capital contribution or subscribed shares.