Rural finance firms get boost

By Zhang Fengming  |   2009-5-21  |     NEWSPAPER EDITION

CHINA will give subsidies to rural financial institutions to provide more credit to less-developed regions, the Ministry of Finance said yesterday.

Qualified rural financial institutions will receive subsidies equal to 2 percent of their average loan books, the ministry said on its Website.

Rural banks, lending companies and credit cooperatives that posted a growth in loans in the previous year and whose loan-deposit ratio is at least 50 percent will receive the subsidies, the ministry said.

Meanwhile, the ministry is also giving similar favorable policies to stimulate lending in five pilot provinces - Shandong, Henan, Hunan, Heilongjiang, Yunnan - and the Xinjiang Uygur Autonomous Region. If a county-level financial institution issues at least 15 percent more agriculture-related loans than the previous year, the ministry will award the company 2 percent of the part that exceeded the previous year's total.

China will support rural economic and social development to achieve balanced growth between the countryside and urban areas.

Overseas banks such as HSBC and Standard Chartered have opened branches in rural China while Citi has opened lending companies, which are banned from accepting deposits.

The reform of state-owned Agricultural Bank of China is also part of the effort.