Beijing will also do more to revamp debt-laden rural credit cooperatives, now the brittle backbone of rural finance.

But the biggest difference to people like Zhang could flow from policies unveiled in December that aim to bring into being new types of rural financial institutions.

In a pilot scheme planned in six provinces, individuals will be allowed for the first time to set up privately owned credit cooperatives and other types of financial firms.

Policy makers hope commercial banks will team up with other private shareholders to set up lenders at county level or below and that farmers or small firms will band together to create new kinds of credit cooperatives, even in small villages.

The six provinces and regions -- Hubei, Jilin, Sichuan, Qinghai, Gansu and Inner Mongolia -- will also experiment with new lending companies under a relaxed regulatory framework.

"These measures will bring enormous change to China's financial landscape by allowing masses of small institutions to emerge," said Yuan Dejun, an economist with Galaxy Securities who advises the banking regulator on rural finance.

While some analysts think profits won't come easy, others see money to be made if loans are priced right and risks are prudently controlled.

"You can also be profitable operating in rural areas," said Wang Jun, a financial sector specialist with the World Bank, who warns of the blurred definitions of "rural" in China.

STEP BY STEP

While the trials could bring newcomers into the market, other steps are needed to galvanise lending to rural areas.

To really arouse the interest of commercial banks and private investors, China may need to free up interest rates for rural lending and build up a credit bureau, experts say.

It may also need to enforce penalties on defaulters and promote agricultural insurance schemes that can protect lenders in the case of natural disasters.

"More incentives have to be introduced, including favourable tax rates and fiscal subsidies in the form of interest discounts," said Song Hongyuan, an expert on the rural economy with a think-tank under the agriculture ministry.

Dai Hui, who heads Dutch lender Rabobank's Beijing office, thinks it will take time for changes to take root.

"I don't expect that things will be completely changed within a very short period of time as the sustainability of a financial institution can only be assessed over the long term," she said.

The peasants-turned-businessmen of Zhuozhou are sceptical.

"Of course we'd like more access to funds, but we don't really believe that can happen," said Zhang's brother, Yukun.

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