Economy
Big banks urged to offer more rural loans
(Agencies)
Updated: 2010-01-24 18:53
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BEIJING: China's central bank on Sunday called on the country's largest banks to offer more loans to the rural sector, where farmers and businesses still have difficulty accessing formal financial services.
Liu Shiyu, deputy governor of the People's Bank of China, called for microloans to be issued to farmers in order to develop rural industry, increase the scale of farming and build village infrastructure. He gave a speech on rural financing and services in Henan Province reported by the Xinhua news agency.
"Encourage big State banks and commercial banks to use many approaches to increase rural financial services and participate in the rural financial market," Liu said.
"Speed up the establishment of village and township banks, microcredit companies and new types of financial organisations like rural mutual cooperatives, and implement policy support and risk management measures."
Poor access to financial services, including loans, was identified a few years ago as one of the factors keeping the Chinese countryside much poorer than the coast or the cities.
Despite years of exhortations, banks have proven reluctant to lend to farmers who often lack collateral.
Rural loans rose 29 percent on year in the first three quarters of 2009, to 8.8 trillion yuan ($1.289 trillion), Xinhua said. That lagged a 34.2 percent growth in total yuan loans in the same period.
