Officials in Jing'an County of eastern Jiangxi Province have
established a loan approval system that rewards "ethical" peasants
with higher rural loans.
The scheme is to promote moral standards among farmers while
providing capital to cash-thirsty areas for rural development.
Rural families' moral standards are classified into five
categories by special ethical appraisal village committees and
local credit cooperatives.
Households are labeled as those with "noble credit," "good
credit," "qualified credit," "not good enough credit," or "without
credit."
The grading of farmers' integrity varies in accordance with the
100 criteria issued by the county government.
Criteria include: "family members take the initiative to
practice family planning," "respect elders," and "are willing to
help others."
Households with "noble credit" can borrow a maximum of 50,000
yuan (US$6,024) without a guarantor from the rural credit
cooperative, a financial institution that grants 80 percent of
China's loans to farmers.
Officials say "model households with credit" can also enjoy an
interest rate cut between 10 and 30 percent less than the normal
level.
Rural residents' net per capita income in 2002 was only 2,476
yuan (US$299.13), with peasants' monthly disposable income reaching
mere 120 yuan (US$14.5).
Officials say the move is aimed at changing the deeply rooted
notion that morals are "pleasant but of no use to farmers."
Though the integrity rating has made some farmers uncomfortable,
most rural families seem to welcome it.
In the first four months of the year, the county granted 42
million yuan (US$4.83 million) of the pegged loans to 6,280 rural
"model households with credit."
"The maximum amount I could borrow from banks was only 2,000
yuan (US$241.62)," said Tu De, a peasant who planted 3.7 hectares
of fruit trees in Liantang Village, Renshou Town.
However, Tu got approval for a 10,000-yuan (US$1,208.11) loan
after his family was named worthy of "noble credit" through a
public appraisal in his village.
But Liu Chengwen, Tu's neighbor, was not so lucky.
The morals committee took a dim view of his water and
electricity fee arrears and he did not qualify for a loan.
"I felt ashamed when my seven-year-old son asked me why our
family could not get loans and a certificate," Liu said.
Farmers say a glance at how much a family can borrow from the
credit cooperative easily reveals the ethical levels of
households.
All farmers who received credit loans have kept up with their
loan repayments, according to Liu Yadong, director of the county's
joint credit cooperative.
(Xinhua News Agency August 1, 2003)