Poverty Alleviation of People’s Bank of China

　　【Overview】  After ”China Rural Poverty Alleviation and Development Outline (2001-2010)” was implemented in 2001, People’s Bank of China further reinforced the stress on and support for poverty alleviation and development, executed the responsibilities of the vice head unit of LGOP, by reforming and improving the soft loan system with stress on minority areas, perfected rural financial environment, mainly served the handicapped, rural migrant workers and urban unemployed & impoverished people through fixed-point aid, played an important role as a financial unit in poverty alleviation and development, gradually formed the full-scale financial poverty alleviation mode, in which soft loans boost poverty alleviation, economic development spurs poverty alleviation, good financial environment benefits poverty alleviation and fixed-point aid supports poverty alleviation.

　　The party committee of People’s Bank of China pays much attention to poverty alleviation and development, and many leaders of the bank, including Zhou Xiaochuan, Liu Shiyu and Guo Qingping, etc, go to survey and greet impoverished mountain areas.

　　【Poverty alleviation survey】  In 2009, in line with LGOP’s unified planning, Liu Shiyu, the vice president, and Guo Qingping, assistant to the president, led a team, with 7 departments, including LGOP, Ministry of Science & Technology and Ministry of Commerce, had in-depth survey on the poverty alleviation and development in Jiangsu, Anhui, Yunnan and Qinghai, to summarize the poverty alleviation and development experience of the 4 provinces systematically and analyze problems in depth, and put forward advice on the state’s poverty alleviation strategy and policy system in the next decade in working principles, system guarantee, goals and objects, etc.

　　People’s Bank of China exerts the responsibility of the vice head unit of LGOP, coordinates with LGOP to design documents on related policies, fixed-point poverty alleviation system, adjustment of stressed counties and perfection of management methods after the new poverty alleviation standards are executed, and perfects poverty alleviation and development management system.

　　【Issue soft loan for poverty alleviation】  1. Reinforce the research and research on soft loan system for poverty alleviation. Conduct survey on soft loans for poverty alleviation across China, analyze soft loan problems in depth, draft “Document on Reporting the Implementation of Credit Pro-poor policies of General Office of People’s Bank of China” (No. Yin Ban Han [209] 493), submit the document to LGOP, research and raise advice on soft loan system for poverty alleviation. Conduct special survey on soft loans for poverty alleviation in minority areas in Xinjiang, etc, draft “Report on Problems in the Execution of Soft Loan Policies for Poverty Alleviation in Xinjiang of People’s Bank of China” (No. Yin Fa (2009) 327), submit the document to the State Council, raise advice, including to reinforce soft loans, enlarge the impoverished county scope in Xinjiang and improve financial environment, etc.

2. Instruct branches to implement “Circular Concerning Overall Reform to Poverty Alleviation Soft Loan Management System” (Guo Kai Fa Ban No. [2008] 29). Keep innovating “Farmer credit loan”, “Farmer joint guarantee loan” and other credit products, probe the innovative micro credit mode of “Featured economy + small-small credit + government’s guide”, go on boosting “Award and subsidy fund” pilot points and rural credit village/town construction, stir the enthusiasm of financial organizations and boost the expansion of poverty alleviation soft loan scale.

　　At the end of 2009, the balance of soft loans for poverty alleviation was 18.3 billion Yuan. Soft loans were issued mainly to the central area, which was rather impoverished (in 2009, the sum of total soft loans accounted for 26.87% of the total in China, the same hereinafter) and the west (60.57%). Financial organizations, by exerting their own operation features and business advantages, competed fairly and publicly, and participated in poverty alleviation and development gradually. In 2009, Agricultural Bank of China, rural credit cooperatives and Agricultural Development Bank of China respectively issued 30%, 28% and 27% of the loans in 2009; in the issuance of door-to loans, rural credit cooperatives (the total loans issued accounted for 79% of the total) was the main force in thanks to the large quantity of business points.

　　【Financial policy support】  For many years, minority areas, due to languages, natural conditions and other factors, have been often impoverished areas. Through comprehensive utilization, re-loan, interest rate and credit policy guide, etc, People’s Bank of China reinforces the credit support to the economic development in minority areas, so as to support the infrastructure construction, development of featured industries and ecological environment protection in minority areas.

1. Preferential interest rate policies for trade and production of minority areas. From 1997, the interest rates of normal circulating fund loans for designated enterprises engaged in trade and special commodities with minority are lower than normal one-year circulating fund loan by 2.88%. According to “Circular Concerning Interest Rates of Loans for Trade with Minority and Production of Special Commodities Needed by Minority of People’s Bank of China” (Yin Fa No. (2009) 68), Agricultural Development Bank, urban commercial banks and rural credit cooperatives became new banks of preferential interest rates to provide preferential interest rates for minority areas.

2. Preferential financial policies for Tibet. From the 10th Five-Year Plan, profits of 2.539 billion Yuan were given to the society because of the preferential interest rates to boost the local economic development. 1. Special instructive currency credit policies for Tibet. People’s Bank of China Lasa Branch, according to Tibet’s requirements on economic development and industrial policies, designs unified currency and credit plan drafts for Tibet, reports the draft to the head office of People’s Bank of China and implements the plan after getting approval. 2. Different preferential loan interest rates. The RMB interest rates in Tibet Autonomous Region are lower than standard interest rates by 2%. Permit Tibet’s soft loan interest rate to be 1.08% permanently, which is much lower than the poverty alleviation soft loan interests. 3. Preferential re-loan interest rates. Tibet’s re-loan interest rates are decided by People’s Bank of China Lasa Branch, but shall not be lower than the legal deposit reserves interest rates, and the interest rates are executed after being reported to the head office of People’s Bank of China for approval. 4. The central finance grants special subsidy of 4% based on the average balance for all the loans issued by Tibet Branch of Agricultural Bank of China.

3. Reinforce the fund support to Xinjiang. 1. Reinforce the issuance of agriculture-aid re-loans. From 2003, according to the principle of support to the central area, the west and main cereal production areas, People’s Bank of China reinforces the inter-region adjustment of agriculture-aid re-loans. By the end of 2009, agriculture-aid re-loans in Xinjiang were increased by 3 billion Yuan totally. 2. Reinforce the fund support to the reform of rural credit cooperatives in Xinjiang. By the end of 2009, rural credit cooperatives in Xinjiang arranged support fund of 1.86 billion Yuan totally, whose proportion was the largest across China.

　　【Poverty alleviation of stressed people】  Utilize various policies flexibly, provide conditions for the handicapped in poverty, rural migrant workers, unemployed urban people and other stressed people to increase income.

1. Guide financial organizations to issue recovery and poverty alleviation loans to the handicapped that can work, solve the subsistence of rural handicapped in poverty. Guide branches to implement “Circular Concerning Reform to Recovery & Poverty Alleviation Loan Management System” (Can Lian Fa No. (2008) 13), coordinate China Disabled Persons’ Federation and other departments to handle recovery and poverty alleviation loan & soft loan management, improve the issuance rate of recovery and poverty alleviation loan. In 2009, recovery and poverty alleviation loans of 790 million Yuan were issued, and 68000 disabled persons in poverty were aided, respectively up 18% and 48% over 2008.

2. Improve and reinforce the financial services for rural migrant workers, provide good environment to the employment of impoverished people. Promote “micro secured loans for rural migrant workers”, “return and venture loans for rural migrant workers” and other types of loans, provide convenient loans for rural migrant workers. Reinforce account management, probe, build and perfect rural migrant worker’s salary payment guarantee system. By the end of 2009, branches and sub-branches of People’s Bank of China collected the delayed salary information of 2,720 enterprises, the sum was 1.58 billion Yuan and the No. of related people was 354,000. Perfect payment settlement services, reinforce the popularization of featured services of rural migrant workers’ bank cards. In 2009, the featured services of rural migrant workers’ bank cards finished 17.8235 million transactions, and the value was 22.102 billion Yuan, respectively up 40.4% and 176.9% over 2008.

3. Promote micro secured loans and boost the venture of poor people to spur employment. Instruct local branches to build the linked long-term employment & re-employment system of “micro secured loans, venture training and credit community construction”. Based on implementing the already issued micro secured loan policies, in 2009, People’s Bank of China coordinated Ministry of Finance and other departments to issue “Circular Concerning Improving Micro Secured Loan Finance Discount Policies to Boost women’s Venture and Re-Employment” (Cai Jin Fa No. (2009) 72), and raised the max sum of women’s micro secured loan from 50,000 Yuan to 80,000 Yuan per capita, and raised the max sum of loan per capita to 100,000 Yuan for women in joint operation or organized employment in line with requirements. Instruct financial organizations to utilize the women’s federations’ advantages in organization, propaganda and carrier, implement small-rum secured loan policies and serve women’s venture and employment. By the end of December 2009, the balance of micro secured loans reached 18.869 billion Yuan, up 69.88% over the previous year, and unemployed people were helped to shake off poverty.

　　【Construction of financial ecology environment】  1. Support the development of new-type rural financial organizations. Boost local branches to strictly implement policies on new-type rural financial organization’s deposit reserves management, deposit/loan interest rate management, payment and settlement management, etc, according to “Circular Concerning Policies Related to Village/Town Banks, Loan Companies, Rural Fund Cooperatives and Micro Loan Companies” (Yin Fa No. [2008] 137) and “Instructive Advice on Pilot Micro Loan Companies” (Yin Fa No. [2008] 23), regulate the legal form, foundation, fund sources and fund usage of micro loan companies, boost the development of new-type rural financial organizations steadily and orderly, and increase impoverished farmers’ chances to get financial services.

2. Perfect the payment system construction in rural areas. In recent years, People’s Bank of China has been engaged in the support to the financial infrastructure in rural areas, instructs and supports rural financial organizations to joint big/small-rum payment system and nationwide check image exchange system, so that rural financial organizations can enjoy the central Bank’s fast and efficient payment and settlement services. In 2009, People’s Bank of China issued “Instructive Advice on Improving Payment Service Environment in Rural Areas” (Yin Fa No. [2009] 224), and clarified the principles, general goals and exact requirements to improve the rural payment service environment. By the end of 2009, 20,587 credit cooperatives, 1035 rural cooperative banks, 1,664 rural commercial banks and 88 village/town banks across China accessed the payment system of People’s Bank of China, so as to further smooth rural trans-region remittance channels. In 2009, rural credit cooperatives initiated 22.9456 million transactions through the big-sum payment system of People’s Bank of China and the value reached 39,760 billion Yuan. Instruct local branches to conduct centralized collection and payment business in rural areas through the micro payment system of People’s Bank of China. Some areas, through active cooperation with financial and commercial departments, based on “Home Appliances Going to the Countryside” policies, deducted the subsidy from loans, and financial departments regularly remit the subsidy to dealers through small-small payment system so as to simplify the subsidy issuance flow.

3. Boost the construction of rural credit system and build nice financial ecology environment. To solve farmers’ difficulties in getting loans and banks’ difficulties in issuing loans, to issue and collect poverty alleviation loans actively and steadily, to create good credit environment and to realize the organic combination of the government’s farmer aid polices and banks’ credit policies, People’s Bank of China issued “Instructive Advice on Boosting the Construction of Rural Credit System” (Yin Fa No. [2009] 129) and other documents to boost the construction of rural credit investigation system and build a nice financial ecological environment. All provinces accelerated the construction of rural credit system and achieved good results. For example, 253 rural financial points in 37 counties in Qinghai started farmer’s credit file building, the quantities of counties and rural financial points respectively accounted for 88% and 95.8% of the total; 232 rural financial points in 28 counties built farmer credit evaluation systems, and the quantities of counties and rural financial points respectively accounted for 66.7% and 87.8% of the total.

　　【Fixed-point poverty alleviation project investments】  In 2009, under the leadership of the head office’s party committee, with support from local party and political departments, People’s Bank of China implemented the pro-poor policies issued by the central party committee and the State Council in fixed-point poverty alleviation, innovated poverty alleviation thoughts, developed poverty alleviation paths and insisted on priority to poverty alleviation in intelligence to improve local living and production conditions and increase the income of the poor. By December 2009, various investments of 1.62 million Yuan were issued, including 945,000 Yuan in project construction, mainly including bridge, production, human and animal drinking water, road building, drainage and flood discharge projects; no/low-interest and soft loans 300,000 Yuan for poverty alleviation; 70,000 Yuan as subsidy for needy college students and technical training, 55,000 Yuan in donated materials and 250,000 Yuan for greeting impoverished people.

                                             (People’s Bank of China)