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Rural credit cooperatives step into breach to help lift farmers out of poverty
By Yu Fei and Shi Xinrong |
November 9, 2009, Monday
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Print Edition
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OVER the past 27 years, Shi Shengchang has trudged along the bumpy paths in southwest China's mountainous area, visiting poor villagers.
Shi's greatest joy is seeing impoverished people living a better life with the loans he has offered.
"As long as people are diligent, I believe they can get out of poverty," said Shi, director of the Rural Credit Cooperative in Shuitang Town, of Ziyun County, Guizhou Province.
In China, more than 90 percent of the agricultural loans are provided by the rural credit cooperatives. Different from the large banks whose customers are mainly in cities, the regional rural cooperative financial institutions focus on farmers.
Shi, 47, was born in a poor village. His mother died when he was five, so Shi and his four siblings lived on the meagre income of his father. In 1982, Shi got a job as an accountant with the Rural Credit Cooperative in Pingba Town.
"I didn't know if I would like it. I just wanted to have a try," Shi said.
"After working for several months, I found I loved this job. My family is poor, and all the farmers in the neighborhood are poor. They have no means to make more money. I wanted to help them."
The credit cooperative in the town with a population of 8,000 had only one other staff member before Shi joined. It then had 10,000 yuan (US$1,470) in deposits, and the maximum the cooperative could afford to loan was 8,000 yuan.
Small loans
In China's difficult early years of economic reform, the small loans Shi offered to villagers, ranging from 20 yuan to 200 yuan, helped them buy farming tools, piglets and calves.
"Our work was difficult at that time because of money shortages. But I knew the farmers. I knew they would pay back the loans so long as they found the way to make money," Shi recalled.
In 1992, Shi was promoted to vice director of the Rural Credit Cooperative in Houchang Town. The cooperative, with six staff and total deposits of 270,000 yuan, boosted Shi's ambition to compete with bigger local banks, such as the Agricultural Bank of China, and play a bigger role in poverty alleviation.
"We opened earlier than the Agricultural Bank, and closed much later. We tried to provide more convenient services for the farmers," Shi said. To attract more deposits, he spent most of his working days visiting villagers house to house.
Wu Shaocai, 59, a wealthy villager who had no idea about rural credit cooperatives, became Wu's friend and customer after his repeated visits.
Nearly 15 years later, Shi said he still remembered how Wu showed him his savings.
"He took me to the backyard of his house, lifted a slate and took out a big bag wrapped with layers of newspaper and oilpaper, within which were wads of 10-yuan bills. Many notes had got mildew."
The two took the money to the credit cooperative, and Shi carefully separated the notes, which totaled 3,000 yuan.
Rapid growth
With the Asian financial crisis in 1997 and little profit in rural areas, the four major state-owned banks including the Agricultural Bank of China withdrew, leaving people there with little access to financial services. Even now, 240 towns in Guizhou still have no financial institutions. But that gave the rural credit cooperatives a chance.
The credit cooperatives have developed rapidly after 2000, according to Shi.
The deposits in Shi's cooperative grew from 2 million yuan in 2000 to 10 million yuan in 2004.
To help the farmers get loans, Shi visited all the 6,000 families in 22 villages in two years and set up detailed credit data for the farmers.
The roads to the remote villages were so rugged that Shi often had to go there on foot.
The head of Wantang Village told Shi villagers had no interest in loans. They were more concerned with their houses, most of which were threatened by mud-rock flows.
Knowing that local government had a special fund for renovating old houses, Shi urged the township government to help the village. As a result of his lobbying, each family of the village got a 6,000-yuan government subsidy. Shi also ratified a loan of 30,000 yuan (US$4,400) to each family to help them build new houses in safer areas.
"Only when people live in peace, can they work happily," Shi said.
(The authors are Xinhua writers.)
Shi's greatest joy is seeing impoverished people living a better life with the loans he has offered.
"As long as people are diligent, I believe they can get out of poverty," said Shi, director of the Rural Credit Cooperative in Shuitang Town, of Ziyun County, Guizhou Province.
In China, more than 90 percent of the agricultural loans are provided by the rural credit cooperatives. Different from the large banks whose customers are mainly in cities, the regional rural cooperative financial institutions focus on farmers.
Shi, 47, was born in a poor village. His mother died when he was five, so Shi and his four siblings lived on the meagre income of his father. In 1982, Shi got a job as an accountant with the Rural Credit Cooperative in Pingba Town.
"I didn't know if I would like it. I just wanted to have a try," Shi said.
"After working for several months, I found I loved this job. My family is poor, and all the farmers in the neighborhood are poor. They have no means to make more money. I wanted to help them."
The credit cooperative in the town with a population of 8,000 had only one other staff member before Shi joined. It then had 10,000 yuan (US$1,470) in deposits, and the maximum the cooperative could afford to loan was 8,000 yuan.
Small loans
In China's difficult early years of economic reform, the small loans Shi offered to villagers, ranging from 20 yuan to 200 yuan, helped them buy farming tools, piglets and calves.
"Our work was difficult at that time because of money shortages. But I knew the farmers. I knew they would pay back the loans so long as they found the way to make money," Shi recalled.
In 1992, Shi was promoted to vice director of the Rural Credit Cooperative in Houchang Town. The cooperative, with six staff and total deposits of 270,000 yuan, boosted Shi's ambition to compete with bigger local banks, such as the Agricultural Bank of China, and play a bigger role in poverty alleviation.
"We opened earlier than the Agricultural Bank, and closed much later. We tried to provide more convenient services for the farmers," Shi said. To attract more deposits, he spent most of his working days visiting villagers house to house.
Wu Shaocai, 59, a wealthy villager who had no idea about rural credit cooperatives, became Wu's friend and customer after his repeated visits.
Nearly 15 years later, Shi said he still remembered how Wu showed him his savings.
"He took me to the backyard of his house, lifted a slate and took out a big bag wrapped with layers of newspaper and oilpaper, within which were wads of 10-yuan bills. Many notes had got mildew."
The two took the money to the credit cooperative, and Shi carefully separated the notes, which totaled 3,000 yuan.
Rapid growth
With the Asian financial crisis in 1997 and little profit in rural areas, the four major state-owned banks including the Agricultural Bank of China withdrew, leaving people there with little access to financial services. Even now, 240 towns in Guizhou still have no financial institutions. But that gave the rural credit cooperatives a chance.
The credit cooperatives have developed rapidly after 2000, according to Shi.
The deposits in Shi's cooperative grew from 2 million yuan in 2000 to 10 million yuan in 2004.
To help the farmers get loans, Shi visited all the 6,000 families in 22 villages in two years and set up detailed credit data for the farmers.
The roads to the remote villages were so rugged that Shi often had to go there on foot.
The head of Wantang Village told Shi villagers had no interest in loans. They were more concerned with their houses, most of which were threatened by mud-rock flows.
Knowing that local government had a special fund for renovating old houses, Shi urged the township government to help the village. As a result of his lobbying, each family of the village got a 6,000-yuan government subsidy. Shi also ratified a loan of 30,000 yuan (US$4,400) to each family to help them build new houses in safer areas.
"Only when people live in peace, can they work happily," Shi said.
(The authors are Xinhua writers.)
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