ACCESS TO FINANCE - Asian Development Bank

ACCESS TO FINANCE

MICROFINANCE INNOVATIONS IN THE PEOPLE'S REPUBLIC OF CHINA

ASIAN DEVELOPMENT BANK

ACCESS TO FINANCE

MICROFINANCE INNOVATIONS IN THE PEOPLE'S REPUBLIC OF CHINA

ASIAN DEVELOPMENT BANK

? 2014 Asian Development Bank

All rights reserved. Published in 2014. Printed in the Philippines.

ISBN 978-92-9254-857-5 (Print) 978-92-9254-858-2 (PDF) Publication Stock No. RPT135633-2

Cataloging-in-Publication Data

Asian Development Bank. Access to finance: Microfinance innovations in the People's Republic of China.

Mandaluyong City, Philippines: Asian Development Bank, 2014.

1. People's Republic of China.2. Microfinance.3. Finance.I. Asian Development Bank.

The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.

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Contents

Tables and Figures

v

Foreword

vi

Acknowledgments

vii

Abbreviations

viii

Rural Financial Innovation in the People's Republic of China

1

Rural Financial Reform

1

Pre-reform Rural Financial Markets and Rural Financial Institutions

2

Reforms Since 2005 and Their Outcomes

3

Unresolved Issues

6

Rural Financial Regulation and Supervision

8

Introduction

8

Rural Financial Markets

9

Urgent Need for Improving Financial Supervision in the Rural Areas

11

Factors that Impede Supervision

12

Recent Efforts to Introduce Innovations in Rural Financial Regulation

and Supervision

13

Issues Needing Further Study

15

MSE Finance

17

Introduction

16

Micro and Small Enterprise Financing in the PRC

19

Causes of SME Financing Difficulties and Possible Solutions

22

Relationship Lending

24

Bank Lending Techniques

25

Bank Organization for Small-Enterprise Financing

27

Two Business Models for Small-Enterprise Financing

28

Findings of the Field Survey

31

Pilot Implementation of the IPC Model in the PRC

32

Conclusions

40

Financing the Agricultural Value Chain

42

Introduction

42

Chanyehua and Financial Support

44

Cooperative Financing

49

Agricultural Value Chain Financing

55

Problems for Further Study

61

NGO Microfinance: The Case of CFPA Microfinance

63

Development of CFPA Microfinance

63

Management of CFPA Microfinance

65

Loan Products and Processing

69

Management of Loan Officers

75

iii

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