Financial China

Mini-boom in grassroots finance

  • Published 01 Jul 2010

A number of initiatives are creating the conditions for a mini-boom in grassroots finance that appears set to drive the development of rural areas for several years to come.

By the end of March 2010, accumulated agriculture-related loans made by China's banking industry were Rmb 9,590bn ($1,414bn, €1,155bn, £944bn), accounting for 23% of total loans made by the banking industry. Of the Rmb 9,590bn agriculture-related loans, only about 23% were made to rural households, which means only about 5.3% of total loans of China's banking industry went to rural households. This percentage has changed little during the past 20 years. Such figures, plus the widespread assumption that personal credit records are non-existent in rural areas, give rise to a general sense that the concept of rural finance is still embryonic.

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