BEIJING -- Citibank China on Tuesday said it had obtained regulatory approval to establish two lending companies in the country's rural areas, making it the first foreign bank to start such a business domestically.
The firms, respectively in Gong'an County and Chibi City of central Hubei Province, would offer both secured and unsecured loans, the bank said in a statement.
They are expected to be operational in months, according to the statement.
A Hubei Provincial Banking Regulatory Commission source told Xinhua the companies each had registered capital of 17 million yuan ($2.5 million) and were scheduled to start operation by year end.
"We understand the imperative to contribute to the further development of financial services in rural China. We believe these lending companies represent a compelling business model that will support the accomplishment of this objective," Citibank China chief executive Andrew Au said.
The rapid development in the agricultural sector in recent years has led to a huge increase for credit demand in Gong'an County and Chibi City.
