An Internet of Things-enabled log cabin in Ludishao, Southwest China's Guizhou Province Photo: Huang Ge/GT

 Ludishao, a remote village in Southwest China's Guizhou Province, has become an unlikely leader in high-tech credit reporting. 

It was the first village in the country to apply blockchain technology to build an online credit regulation system for farmers.

Ludishao is under the administration of Qingzhen, a satellite city of Guiyang, capital of Guizhou Province.

"Qingzhen has a total population of 500,000, and among them 380,000 are farmers. In a bid to help them address their growth challenges, we have promoted the industrialization of the agricultural sector since 2009," said Wang Guosong, head of the Credit Construction Department of Qingzhen.

But some behaviors by local farmers that negatively affected credit emerged during the process, as they deliberately broke contracts with corporate partners to seek personal interests, which brought large losses to local development, Wang told the Global Times on Friday.

Other negative behaviors were also frequently found among local farmers such as failure to repay loans on time, refusal to support the elderly and shortchanging customers.

Since then, local departments have realized that uncreditworthy locals would curb the city's economic growth and decided to promote activities to encourage farmers to behave honestly and build villages with sound credibility. 

Based on the offline credit regulation system of Qingzhen, an online credit management platform supported by blockchain technology was introduced in May 2018, aiming to regulate dishonest conduct by farmers and local companies.

It is the first trial in the country involving blockchain technology in the building of a social credit system, Tian Renshan, chief technology officer of Qingzhen-based Far East Technology, told the Global Times on Friday. Far East is the company offering technological support to the platform.

Every farmer starts with a credit score of 100 and their ID information can be tracked in the system, said Wang Yanni, a commentator for local credit systems. Wang has taken part in the building of credit systems for local villages for about 10 years.

"Any negative behavior will be recorded in the platform and their score will be deducted accordingly," she said, noting that there are also related consequences for farmers with low credit scores.

"For instance, a person with a low credit score will be restricted from applying for loans from banks or they will not have priority to enjoy favorable policies offered by the local government," Wang said, adding that there are also ways for farmers to improve their credit scores.

Such efforts have already yielded outcomes. The nonperforming loans of local banks have decreased to around 2 percent at present from about 20 percent in previous years, according to Wang.

So far, a total of 149,727 farming households and 219 enterprises were deemed creditworthy in Qingzhen. Among them, Ludishao has 753 households of farmers with good credit.
Newspaper headline: SW village regulates farmers’ credit via smart system