Microfinance may include several types of financial services, including deposit taking and insurance, while microcredit normally refers to small loans of between 1,000 yuan and 3,000 yuan ($125-$375). The terms are often used interchangeably in the media.
Many are hoping that microfinance can give a boost to rural China, which today faces enormous problems. Some 30 million “relatively” poor people survive on less than one dollar a day, and another 30 million people live in “absolute poverty” of less than 25 cents a day. The vast majority of these are in the countryside, where there is a huge gap in living conditions and public services, such as medical care and education, compared to urban areas.