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Citi China heads into rural areas
By Zhang Fengming |
October 14, 2009, Wednesday
|
Online Edition
Online Edition
Citi China yesterday started operating its third lending company in China to ride the rising credit demand in rural areas.
The northeastern Liaoning Province lender, Dalian Wafangdian Citi Lending Co Ltd, has a registered capital of 17 million yuan (US$2.5 million).
"China remains one of Citi's highest priority markets around the world," said Stephen Bird, chief executive officer of Citi Asia Pacific, in Wafangdian yesterday. "We will continue to expand our presence here across multiple lines of business."
The establishment of the lending company reflects Citi's intent to venture into smaller towns and counties in China, he added.
Citi was the first international bank to launch the lending company model in China. Citi also has two lending companies in Hubei Province, in the towns of Gong'an and Chibi.
The new Wafangdian Credit will be staffed by 10 bankers. It will offer both secured and unsecured loans to the poorly served segments of the rural population - the self-employed and small enterprises.
Wafangdian, covering 3,794 square kilometers, has rich agricultural and mining resources, and a sizable fishing industry.
Andrew Au, CEO of Citi China, said he sees significant credit demand driven by local economic growth in Wafangdian and the bank intends to build a commercially sustainable business.
Citi, a major international bank in China, has corporate and personal banking operations in China, mostly in Beijing , Shanghai and Guangzhou.
Overseas banks are following the central government's call to venture deeper into rural areas. HSBC and Standard Chartered Bank have already set up rural banks in China.
The rural sector has been avoided by major banks in China in the past as farmers lack collateral.
However, the central government has taken initiatives to encourage banks to go west and go rural. Financial services companies have a lower capital requirement in the rural areas than in major cities.
The northeastern Liaoning Province lender, Dalian Wafangdian Citi Lending Co Ltd, has a registered capital of 17 million yuan (US$2.5 million).
"China remains one of Citi's highest priority markets around the world," said Stephen Bird, chief executive officer of Citi Asia Pacific, in Wafangdian yesterday. "We will continue to expand our presence here across multiple lines of business."
The establishment of the lending company reflects Citi's intent to venture into smaller towns and counties in China, he added.
Citi was the first international bank to launch the lending company model in China. Citi also has two lending companies in Hubei Province, in the towns of Gong'an and Chibi.
The new Wafangdian Credit will be staffed by 10 bankers. It will offer both secured and unsecured loans to the poorly served segments of the rural population - the self-employed and small enterprises.
Wafangdian, covering 3,794 square kilometers, has rich agricultural and mining resources, and a sizable fishing industry.
Andrew Au, CEO of Citi China, said he sees significant credit demand driven by local economic growth in Wafangdian and the bank intends to build a commercially sustainable business.
Citi, a major international bank in China, has corporate and personal banking operations in China, mostly in Beijing , Shanghai and Guangzhou.
Overseas banks are following the central government's call to venture deeper into rural areas. HSBC and Standard Chartered Bank have already set up rural banks in China.
The rural sector has been avoided by major banks in China in the past as farmers lack collateral.
However, the central government has taken initiatives to encourage banks to go west and go rural. Financial services companies have a lower capital requirement in the rural areas than in major cities.
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