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BIZCHINA> Top Biz News
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Small loans make big difference
By Bi Xiaoning (China Daily)
Updated: 2009-03-02 07:55 He Guangwen, a professor with China Agricultural University, said: "It's natural for financial institutions to expand their business area when they develop to a certain level, which can boost their efficiency and cut costs." Micro-credit in Inner Mongolia has also received a great deal of attention from international organizations. The US-based non-profit organization ACCION International and the World Bank's International Finance Corporation (IFC) recently set up a micro-credit joint venture in this region. Meanwhile, the Asian Development Bank is in negotiations with a local lender, Hohhot City Commercial Bank. The two plan to provide $100 million respectively to operate a micro-credit wholesale business. Bangladesh's Grameen Bank and Xac Bank from the Republic of Mongolia also conducted investigations in Inner Mongolia to select locations for micro-credit projects. Micro-credit has also proved profitable in Shanxi province, where the country's first micro-credit firms opened for business over three years ago. Located in Pingyao county, Jinyuantai Micro-credit Company and Rishenglong Micro-credit Company were the country's first pilot units, both of which were founded on Dec 27, 2005. "The profit margin (of the micro-credit company) is even more stable than the coal business that I used to be involved in," said Han Shigong, chairman of Jinyuantai Micro-credit Company. With registered capital of 1.6 million yuan, the company has realized about 5 million yuan in profits since it was founded. The company's profit margin is over 15 percent and around 99.5 percent of loans are repaid on time. "The risks of serving agriculture-related business are not as high as I imagined," said Han. (For more biz stories, please visit Industries)
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