Poverty Alleviation of China Banking Regulatory Commission

　　【Construction of poverty alleviation system】 In early 2010, in view of the large area of ​​severe drought in some southwestern provinces and the floods in the northwest area, China Banking Regulatory Commission (CBRC) issued the "Emergency Notice on Ensuring the Issuance of Credit Funds for Spring Ploughing and Farming Preparation" and demanded agro-banking financial institutions, particularly small and medium-sized financial agencies in rural areas to overcome various unfavorable factors to ensure that agriculture-related credit loans are not reduced and support for agriculture is not weakened in accordance with the requirements of scientific development concept and based on the national economy situation so as to effectively promote the sustained and healthy agricultural and rural economic development. According to the document, rural small and medium-sized financial institutions must increase investment of credit loans and the proportion of credit loans should be higher than that in 2009.

　　In June 2010, China Banking Regulatory Commission and China Insurance Regulatory Commission jointly issued the "Opinions on Strengthening Cooperation in Agriculture-related Credit and Insurance" to give full play to the important role of banks and insurance in supporting "three rural" issues and jointly solve the “loan obtaining” problem in rural areas. Banking financial institutions were required to take agriculture-related insurance as a consideration factor for credit extension and establish the mechanism to link the insurance situation with ratings. Borrowers are encouraged to insure the loan collateral and banking financial institutions determine the favorable terms after confirming the insurance category and proportion. Through warranty pledge, they expand the scope of collateral materials of borrowers and actively explore the agriculture-related loan guarantee insurance business.

　　Since July 2010, due to various domestic factors, the general level of prices has been rising month by month, especially the rising prices of agricultural products and other necessities for urban and rural residents have become a main factor to raise the general level of prices. In November 2010, China Banking Regulatory Commission issued the "Emergency Notice on Guaranteeing Credit Loans for Agricultural Production" and required the banking institutions to focus on supporting agricultural production, processing and circulation and adopt effective measures to support agricultural production and guarantee supply of farm produce so as to promote the price stability in agricultural market based on the overall economic development situation of China. According to the document, the banking financial institutions must develop credit schemes based on actual situation, increase agricultural lending to meet the needs of agricultural production, processing and circulation for effective credit loans, accurately grasp the market information and price trends of agricultural products and byproducts, give priority to the farm produce in serious shortage, enhance the production and processing capacity and increase the market supply.

　　【Issuance of agriculture-related credit loans】In 2010, based on the implementation of the strategy for coordinated urban and rural development and the overall situation of domestic economic transition, China Banking Regulatory Commission clearly stated that banking financial institutions must achieve “two no-less-than” goals in agriculture-related loan issuance in 2010 – the total loans should be no less than that of last year and the growth rate of loans should be no lower than the average of all loans. For rural small and medium-sized financial institutions, the main forces serving agriculture, China Banking Regulatory Commission put forward the objective of “three higher”: The growth rate of agriculture-related loans should be higher than the average of all loans, the increase in agriculture-related loans should be higher than that of the previous year and the proportion of agriculture-related loans should be higher than that of the previous year. To achieve the above goals, China Banking Regulatory Commission proposed to issue agriculture-related loans according to seasons, effectively strengthen the monitoring and assessment, and particularly enhance the supervision and guidance for the banking financial institutions in major agricultural and grain provinces. It urged and guided banking financial institutions, especially the small and medium-sized financial agencies in rural areas to strictly control the direction of credit loans and optimize the credit structure, resolutely reduce non-agricultural credit loans and effectively increase agriculture-related loans to ensure the needs of agriculture for credit loans. As of the end of 2010, the agriculture-related loans issued by banking financial institutions increased by 285.92 billion Yuan over the previous year, and the growth rate was 9 percentage points above the average, basically achieving the “two no-less-than” objective. The agriculture-related loans issued by rural cooperative financial agencies increased by 107.2 billion Yuan over the previous year with growth rate 4.7 percentage points above the average; and the proportion of agriculture-related loans was 2.6 percentage points above that in 2009, basically achieving the objective of “three higher”.

　　【Construction of equalization of rural financial services】 In October 2009, China Banking Regulatory Commission held a work conference in Guizhou and clearly proposed to explore effective ways for solving rural equalized financial service problem and strive to address the financial service problem in the towns not covered by financial services in three years so as to make the basic financial services cover all towns in the country. To this end, China Banking Regulatory Commission issued a special document to call on local banking financial institutions to implement the strategy of “serving the whole village or contiguous areas through setting up two points and providing two machines” based on local conditions and careful field research and estimates with one plan for one town. That is to say, the credit clerks of nearby financial agencies are responsible for the loan issuance of nearby villages and contiguous areas through setting up standardized for simple business offices and installing POS and ATMs. They can also provide regular fixed-point services through mobile service vehicles. After one year of practice, a breakthrough was made in the work and historic changes are taking place to the rural financial services in poor and remote areas. As of the end of 2010, the number of towns not covered by financial institutions in China decreased from 2945 at the end of June 2009 to 2312, 10 provinces and 5 cities with independent planning were the first to achieve full coverage of towns in financial services and all the original 708 towns not covered by financial services have founded financial institutions. 31 provinces and 5 cities with independent planning have achieved ahead of schedule full coverage of towns in basic financial services. As of the end of 2010, the coverage of domestic township financial services was extended to include 3.539 million additional households and 6,400 additional enterprises; a total of 3.128 million deposits of 20.95 billion Yuan were saved, 3.179 million loans of 5.52 billion Yuan were issued and 506,000 remittance of 2.19 billion Yuan were handled. The masses were satisfied as they got economic benefits, the government was satisfied as it promoted the economic development and the banks were satisfied as they established a good brand image.

　　In the 483 towns newly equipped with financial institutions in 2010, 473 financial institutions’ offices were set up by rural cooperative financial agencies, postal savings banks and Agricultural Bank of China, accounting for 97.9% of the total, including 334 by rural cooperative financial agencies, accounting for 69.2%, 96 by postal savings banks, accounting for 19.9%, and 43 by Agricultural Bank of China, accounting for 8.9%. In the 342 towns that were newly provided financial services in 2010, 340 were provided by rural cooperative financial agencies, postal savings banks and Agricultural Bank of China, accounting for 99.4%, including 251 by rural cooperative financial agencies, accounting for 73.4%, 64 by Agricultural Bank of China, 18.7%, and 25 by postal savings banks, 7.3%. 

　　【Development of new-type rural financial institutions】 Since the end of 2006, in order to address the low-coverage of banking financial institutions and undersupply and weak competitiveness of financial services in rural areas, China Banking Regulatory Commission has adjusted and loosened the access policies for banking financial institutions to serve rural areas. According to the principle of "low threshold and strict regulation", it introduced domestic and foreign banking capital, industrial capital and private capital to implement pilot work of three new-type rural financial institutions, namely township banks, lending companies and rural mutual funds. After four years’ hard work, as of the end of 2010, there were a total of 509 new-type rural financial institutions, with an increase of 279 compared with that at the beginning of the year, of which 395 (349 township banks, 9 lending companies and 37 rural mutual funds) were opened and 114 got approval for construction. The deposits amounted to 75.07 billion Yuan, 2.8 times that at the beginning of the year; and the total loans reached 60.09 billion Yuan, 3.3 times that at the beginning of the year, including SME loans of 30.27 billion Yuan and rural household loans of 20.32 billion Yuan, accounting for 83.9% of the total.

　　【Rural financial innovation】 In the promotion of rural micro-credit, under the principle of serving "three rural" issues, serving the county and serving local economic development, China Banking Regulatory Commission actively led and guided agriculture-related banking financial institutions to innovate the varieties of new rural micro-credit loans based on actual situation, improve the marketing pattern and strengthen credit support for food production and farmers’ income growth. On this basis, in view of the difficulties for rural residents to get loan guarantee, China Banking Regulatory Commission encouraged innovations in loan guarantee and supported government at all levels to establish guarantee funds or security agencies partly supported by the government and jointly participated by relevant market players. Local governments also actively explored approaches to pledge of forest rights, fishing rights and the right to use water shoals, chattel mortgage, pledge of accounts receivable and orders, etc.

　　【Support disaster relief】  After Yushu Earthquake in Qinghai Province, in accordance with the unified deployment of the State Council, China Banking Regulatory Commission promptly started the emergency response mechanism and adopted positive and effective measures to guide and urge banking financial institutions to overcome difficulties and resume financial services based on the overall situation. The business of 25 offices of banking financial institutions in Yushu were comprehensively recovered, which guaranteed the smooth fund settlement channels for post-disaster reconstruction. As the financial support was timely, financial institutions issued 12.97 million Yuan of loans, which greatly supported the farmers and herdsmen in disaster-hit areas to recover farming, pasturing and production.

　　After the debris flow in Zhouqu of Gansu, China Banking Regulatory Commission promptly guided local banking financial institutions to overcome difficulties and guarantee the financial services in disaster-hit areas. First, hand special cases with special methods, open the donation and remittance channels for flood control and disaster relief to guarantee timely provision of donations and relief materials. Secondly, strive to recover the normal operation of business offices in disaster-hit areas on a safety basis to meet the needs of the clients in disaster-hit areas for transactions and cash. Thirdly, actively issue flood control and disaster relief loans, provide special financial support for purchase of flood control and disaster relief materials and the industries and enterprises severely affected by the disaster such as electric power, communication and highroad, and ensure timely issuance of disaster relief loans.

　　Facing increasing risks for issuing post-disaster reconstruction loans for rural households affected by Wenchuan Earthquake, China Banking Regulatory Commission issued the "Notice concerning Strengthening Risk Control on Post-disaster Reconstruction Loans for Rural Households Affected by Wenchuan Earthquake" and required all levels of regulatory authorities and banking financial institutions to seriously carry out research, make early planning and adopt effective methods to effectively prevent the risks for issuing post-disaster reconstruction loans for rural households and avoid bad debt and risk overlay.

　　(Yin Youxiang, Cooperation Department, China Banking Regulatory Commission)

 

 

　　Poverty Alleviation of China Insurance Regulatory Commission

　　【Overview】 In 2010, according to the unified deployment of the central government and the State Council, China Insurance Regulatory Commission (CIRC) continued to conduct fixed-point poverty alleviation in Chayouzhong Banner and Chayouhou Banner of Wulanchabu City in Inner Mongolia Autonomous Region (hereinafter referred to as "two banners"). After the “Notice of the General Office of the CPC Central Committee and the General Office of the State Council on Further Promoting Fixed-point Poverty Alleviation” (Ting Zi [2010] No. 2) was issued, to implement the spirit of the “Notice”, with a deep understanding of the significance of fixed-point poverty alleviation in the poverty reduction and development in the new era, in accordance with the instructions of “trying to combine anti-poverty funds with insurance business” of central leaders, CIRC gave full play to the advantages of insurance industry, arranged some anti-poverty funds to support insurance projects and some for production and living conditions’ improvement, and successfully completed the anti-poverty task in 2010.

　　In 2010, CIRC invested a total of 1.1 million Yuan to implement five poverty relief projects and production construction projects in the two banners and achieved good economic and social benefits.

　　【Construction of poverty relief projects by insurance service】1. Agricultural service transformer insurance subsidy: It is an important measure for boosting the sustained agricultural development and income growth of farmers to actively promote agricultural insurance. In July, August and September every year, Chayouzhong Banner is often hit by natural disasters due to heavy rain. In order to strengthen the ability of farmers and herdsmen to resist disasters and avoid serious losses of farmers after their transformers were stolen, in 2010, China Insurance Regulatory Commission invested 180,000 Yuan in Chayouzhong Banner as insurance subsidy for agricultural service transformers of impoverished villages.

2. Safety insurance subsidy for poor students. To ensure that students from rural and pastoral areas are protected by safety insurance, in 2010, China Insurance Regulatory Commission invested 20,000 Yuan in Chayouzhong Banner as safety insurance subsidy for poor students from impoverished villages, and invested 200,000 Yuan in Chayouhou Banner as safety insurance subsidy for 3,994 primary school students, covering 7 schools including Tumuertai, Honggeertu, Xile, Wulanhada, Benhong, etc., aiming to cover all primary school students in rural pasturing areas and prevent the chidren of farming and pasturing families from returning or falling into poverty due to illness, etc.

　　【Implementation of production and life construction projects】 1. Water-saving irrigation projects: In recent years, potato growing industry began to take shape in Chayouzhong Banner and “Kebuer” potato has been launched into the international market. Due to years of drought and lack of groundwater resources in some areas, however, the yield of potatoes was low and unstable and the brand advantage of potatoes was not given full play. In order to enhance the ability of agricultural and pasturing industry to resist natural disasters, improve the efficiency of water utilization, boost the development of potato industry and effectively speed up the pace of poverty reduction among poor farmers and herdsmen, in 2010, CIRC invested 300,000 Yuan of anti-poverty funds in Chayouzhong Banner, dug two electromechanical wells for Guangyilong Village of Guangyilong Town, laid buried pipelines of 2,800 meters and developed water-saving irrigation area of 390 mu.

2. Subsidy for the new rural social endowment insurance. The new rural social endowment insurance is a major agriculture-benefiting policy. In order to support the construction of new rural and new pasturing area in Chayouhou Banner, effectively increase efforts on prohibition of grazing, make the elderly be looked after properly and solve farmers’ worries, in 2010, CIRC invested 300,000 Yuan in Chayouhou Banner as premium subsidy for 1500 poor herdsmen to participate in the new rural social endowment insurance system (200 Yuan per person).

　　【"Warmth-giving" activities】 CIRC carries out "warmth-giving" activities in the Spring Festival every year. In 2010, CIRC issued 50,000 Yuan for each of the two Banners as usual to purchase coal, rice, flour and meat for 500 poverty-stricken households.