Abstract: Micro-loan companies are an important part of private finance. As a subject of financial innovation, the micro-loan companies can effectively restrain illegal private loans and supplement to the formal finance, however, they are confronted with the problems of fund source and operation risks. At present, the development of China’s micro-credit companies is in a state of regional imbalance and institutional supply shortage. Over-reliance on the funds infusing from financial institutions of the banking sector would result in such problems as single financing channel, financing difficulties and imperfect mechanism for prevention and control of operational risks, which have become the constraints in their development. It is necessary to focus on the institutional optimization“to improve the financing channels from the financial institutions of the banking sector, while exploring new ways of financing; to improve the methods of loan guarantee and establish a diversified risk prevention and control mechanism”, so as to form a joint force in order to promote the sustainable development of small loan companies.

Key words: micro-loan company; fund sources; financing approach; operational risk; prevention and control mechanism