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Accelerating rural financial reform and making it easier for people in rural areas to access capital are key parts of the country's effort to reform its overall financial system, according to the National Financial Work Conference. The conference called for measures to improve financial services in rural areas to support the government's plan to create a "new socialist countryside". The government is to speed up the establishment of a wide-reaching multi-level, sustainable financial system in rural areas, which have been underserved by the existing financial system. The conference called for commercial, policy-financing, cooperative and other financial institutions to enter the market of rural finance. The meeting produced "crucial ideas for future rural financial reform", said LinYifu, of Peking University. Lin said China's current financial structure does not give sufficient support to rural areas, leaving many farmers and rural businesses without the capital they need to develop. He added that rural finance is the weakest point in the country's entire financial system. Low profits for rural cooperatives, a lack of rural financial products and services and the difficulty many farmers experience in securing loans are some of the problems plaguing the rural financial system. Official statistics show that people in rural areas have less access to financial services than their urban counterparts. Only 60 percent of the 120 million rural households that need bank loans are able to access them. At present, farmers are responsible for only 15 percent of the country's total bank loans and deposits. Per capita borrowing among farmers amounted to 5,000 yuan at the end of 2005, less than 10 percent of the amount in cities. Detailed measures to address the situation are expected soon. At the conference, Premier Wen Jiabao called for the establishment of diversified financial institutions and microfinance services in rural areas. To this end, the China Banking Regulatory Commission launched a pilot program in Sichuan, Gansu, Qinghai, Hubei, Jilin and the Inner Mongolia last month that made it easier for financial institutions to open outlets in rural areas. (China Daily January 22, 2007) |
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