Develop micro-finance

The guideline the People's Bank of China and the China Banking Regulatory Commission recently issued on pilot schemes of small-sum loan companies is a much-needed step to facilitate faster development of micro-finance in China.

Pilot schemes had been carried out in five provinces since early 2005 to increase financial support for small businesses and farming. But the absence of an official policy to define the nature of these pilot companies and to guide their operations has long hindered their expansion.

It is expected that the new guideline will encourage the establishment of more small-sum loan companies and enable them to play a more active role in micro-finance.