Microfinance banks
Some of the middle and low class individuals do depend on small microfinance banks for loans to finance tjheri small business enteprpirzes. The Chinese through their central bank,has made it possible for themto affors such loans by controlling the interest rates thereby reducing the interest rates charged by the countrys central bank to other commerialbanks and micri-finance organizations. In return, the commersialbanks and smallmicrifunance organizations do pass the benefit of lowinterest rates to their clients who arte the citizens that depend on such loans for businesses and other development activities. The government through this policy encourages small market enterprises to develop therefore enhancing better living standard among the locals. (Chemla, 2000). The central bank also do exercise its policies effectively in regulating the amount of money in circulation to avoid any chance through which their currency can experience a reduction in value due to excessive supply or a lot of cash being in the hand of the public.
By having effective ways of controlling the flow ofmoney into the country, the centralbank makes it wasy for other sectors of the economy thatalsoinclude major business owners to have easy trading ability or termsin which their money will not have dropin value regularly.Due to this,their goods will still be more valuable within the local and outside market. This willmake it easier for the manufactures to produce more goods than when the value of their currency drops in relation to the US dollar . In that situation, they will find it fincncing their production cost due to the fact that they will have to spend money in obtaining production materials therefore they will be forced to increase prices of their products. This will intern make them experience adrop in sales volume. Basically, the Chinese government has managed to developthe fincnaiassecotr as one of the best economic developmet strategies.Through that, they have ontained foru major banks which are abl;e to offer loans to major businesses that boosts the country’s economy. Additionaly, there are smallcommerialbanks and microfincnae organizations which do offer bankind services to small businesses and household needs