This paper systematically expounds the business operation and risk management of microfinance from the aspects of non-financial investigation, financial investigation, investigation and design of guarantee measures, risk assessment and project decision-making, loan process control, post-loan management and recovery, and puts forward a series of methods and suggestions on how to select qualified loan applicants and avoid the risk of loan loss. This paper systematically analyzes the relevant contents of laws and regulations such as property law, debt law, contract law, guarantee law and criminal law, which are closely related to microfinance, and provides reference and guidance for relevant entities engaged in microfinance to operate in compliance and avoid serious compliance risks. Especially, in order to prevent and avoid the threat and harm of recurring business risks and moral hazards in financial institutions and quasi-financial institutions to relevant entities, Risk Management and Business Operation Practice of Small Loan Companies creatively put forward a series of risk assessment viewpoints and formulated risk assessment standards for reference by relevant risk management entities.