SOURCE / ECONOMY
Chinese banks, firms vow more innovative financing to support rural revitalization
Published: Nov 23, 2022 09:37 PM
Aerial photo taken on Oct. 11, 2022 shows staff members feeding fish at a cold-water fish farming base in Ming'an Village, Liaozi Township, Chengkou County, southwest China's Chongqing. Taking advantage of the ecological resources, cold-water fish farming in Liaozi Township has become a distinctive local industry and increased the villagers' income.(Photo: Xinhua)

Aerial photo taken on Oct. 11, 2022 shows staff members feeding fish at a cold-water fish farming base in Ming'an Village, Liaozi Township, Chengkou County, southwest China's Chongqing. Taking advantage of the ecological resources, cold-water fish farming in Liaozi Township has become a distinctive local industry and increased the villagers' income.(Photo: Xinhua)


As China's rural areas and farmers are seeing increasing demand for diversified and multi-level financial products and services, it is crucial to allocate more innovative financial resources and services to the key and weak spots of the agricultural sector so as to better support the progress of rural revitalization, officials and scholars said at the Financial Street Forum 2022 in Beijing on Wednesday.

This is also a major part of the country's efforts to guide financial markets toward supporting the real economy, and financial institutions need to closely follow the development of the agricultural sector to better meet the differentiated financial needs of farmers with continuous innovation, said Fu Wanjun, president-designate of the Agricultural Bank of China (ABC) at a parallel session of the forum.

ABC has been taking rural revitalization as a top priority of its business operations, and its outstanding loans to agriculture, rural areas and farmers jumped from 2 trillion yuan ($279 billion) in 2012 to 7.2 trillion yuan at the end of October 2022, Fu said.

The bank has been promoting digital transformation and accelerating the use of modern technology to serve rural areas. In addition, it has been facilitating green development in areas such as ecological agriculture and county-level industrial transformation and upgrading. By the end of October, the bank's outstanding balance of green loans exceeded 1 trillion yuan and that of rural construction loans reached 1.5 trillion yuan, according to Fu.

As the nation's largest agricultural reserve company, China Grain Reserves Group has conducted a pilot program of digital yuan purchase and settlement for farmers since September 2021. Transactions are traceable and they aren't delayed, Chi Jingtao, general manager of the company said at the forum.

The group will further expand the program and step up efforts to properly carry out the task of grain reserve to guide grain production and help increase farmers' incomes, Chi said.

Besides banks and large-scale agricultural enterprises, private technology companies have also explored and developed innovative financial services to boost the growth of the agricultural sector. 

For instance, the Beijing-based fintech company Duxiaoman launched an interest-free loan project in May 2019 to help farmers to develop special farming, aquaculture, homestead tourism and other special and green industries. After more than three years, Duxiaoman's project has covered over 150,000 farmers from 242 villages. 

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times that industrial and financial support are two key tools to help the development of the rural area.

Banks need to expand their footprints to rural areas and bring services to farmers, including more convenient payment services and the facilitation of financing, Dong noted.

China's financial institutions have increased support for farmers in recent years amid the COVID-19 pandemic. According to data from the People's Bank of China, the nation's central bank, outstanding loans related to agriculture in both local and foreign currencies came in at 47.1 trillion yuan by the end of the second quarter of 2022, an increase of 13.1 percent year-on-year.

The Ministry of Agriculture and Rural Affairs in September announced plans to support local governments in developing insurance products in accordance with their own conditions, so as to provide a strong guarantee for the steady and sound development of industries with distinctive features in rural areas.

Global Times