Book series explores challenges of today's microfinance

China has tried many ways of alleviating poverty, and in 2005, 10 commercialized companies were authorized to run such a business. By June 2013, according to Pan, the number of companies dealing with microfinance had increased to 7,086, with loans of up to 704.3 billion yuan.

"It seems China has been turned into the world's most exciting place for micro-loans overnight," says He Daofeng, chairman of CFPA Microfinance and chief editor of the book series.

CFPA Microfinance, in 17 years of practicing in Chinese rural areas, has trained local middle-aged women as its loan officers, and "applied the power of familial connections in the small communities as a way to ensure repayments", says He.

But the situation has grown complicated as it's become commercial, and nonprofit poverty alleviation has struggled to separate the definitions of "nonprofit microfinance", "commercial microfinance" and "nonprofit microfinance operated in commercial ways", He adds.

"The separation itself is a joke, as middle- and small-sized companies began to borrow funds created in the name of microfinance," He says.

He also notes that in the rural areas, this "easy money" with ultra-low interest (from the government) tends to be embezzled before it really gets to the people who need it.

"At the top, the officials mean well; and at the bottom, people seek realistic interest they can obtain," he says.

Working in poverty relief since 1986, Renmin University's Kang Xiaoguang is among the experts who hold that to stop the current mess, microfinance should strictly follow the course originally intended for it.

Kang and other authors of the series believe financial service creates chance for increasing social equality, and say the goal of administrators should be making sure the disadvantaged people have a sustainable way to eventually repay the "high-risk" credit loans without collateral.

"We believe, instead of worrying about the disadvantaged people's repaying ability and their credits, we should make the loan obtainer self-reliant by first offering them the chance," says He Xuefeng, another of the book authors.