The future development of microfinance in China depends on the demand for microfinance and the ability of different types of microfinance institution to improve their internal capacity and market：responsiveness on the one hand and change of the legal，regulatory and policy environment on the other hand.

1.Market demand

There is no doubt there is a huge market demand for microfinance services in China.However，it is not an easy task to estimate this demand as it is not clear what type of clients can become potential clients of microfinance institutions.Generally speaking，the market niche for microfinance is mainly micro-enterprises（households）and small enterprises beyond the reach of formal finan