Han, who has worked in the sector for over 25 years, believes that the non-performing loans ratio of some micro-credit firms may reach as high as 30 percent, but they report a rate of only 5 percent to financial and banking regulators.
"If the non-performing loan ratio of micro-credit firms rose above the 10 percent mark, the financial risks will be huge," Du Xiaoshan, a pioneering micro-finance researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, told the Global Times.
Du said micro-credit firms need to focus on quality rather than quantity, especially when the economy is slowing down.
Han of Guoxu Small Loan said the inner operations of some micro-credit firms are still immature.
"Some major shareholders, who are liable on debts but have no management authority, tend to want to control the business operations of the finance firms, which hampers the ability of the managers to run the business," Du noted.
East China's Jiangsu Province was the top-ranking province in number of micro-credit companies, reaching 465 by the end of third quarter, according the central bank.
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