Poverty Alleviation of People’s Bank of China

　　【Overview】 During the "Eleventh Five-Year Plan" period, the People's Bank of China invested a total of 6.846 million Yuan in Yintai District of Tongchuan and Yijun County of Shaanxi Province, coordinated poverty relief interest-free, low-interest and discount loans of 1.25 million Yuan and issued petty loans of 100 million Yuan. 4.21 million Yuan was invested in project construction, involving road and bridge building, drinking water projects, road hardening and drainage works. 446,000 Yuan was issued to subsidize poor college students and carry out technical trainings, donated 840,000 Yuan in kind and cash and allocated 1.35 million Yuan to express sympathy and solicitude for poor people.

　　【Pro-poor discount loan】 Since the implementation of the "Implementation Plan for the Management of Pro-poor discount loans" (Yin Fa (2001 No.185) in 2001, the People's Bank of China and LGOP successively launched the pilot projects for reform of "household loans" and "project loans" and pilot projects for “award for subsidy” to promote microcredit, and continued to increase pro-poor discount loans. In 2006, to continue to deepen the pro-poor discount loan management system reform, the bank issued all the household loan interest subsidies to 592 national key counties for poverty alleviation and development and the financial institutions were selected by the counties. Pilot projects of issuance of project loan interest subsidy to the province were lunched in Hebei, Heilongjiang, Jiangxi, Hubei, Chongqing, Yunnan, Shaanxi and Gansu and the pilot provinces could select the financial institutions by themselves. In 2008, in order to establish and improve the microcredit poverty alleviation management system and operation mechanism in line with the market economy requirements, in accordance with the reform idea of "two decentralizations and two reforms", the central government decentralized the direct management power of anti-poverty discount loans and interest subsidies to the provincial government, and the direct management power of household loans and interest subsidies to the county government. The poverty relief loans were no longer completely operated by the Agricultural Bank of China, but by the market. Fixed interest rate changed into fixed subsidy. The central government arranged interest subsidy for one year. During the period, the interest subsidy was issued based on annual interest rate of 5% for household loans and annual interest rate of 3% for project loans.

　　The continuing reform of the management system for poverty relief interest subsidies played an important role in mobilizing the enthusiasm of financial institutions, improving the mechanism for a virtuous cycle of pro-poor discount loans, improving the production and living conditions of the masses in impoverished areas and narrowing the wealth gap between various regions. According to preliminary statistics of the People's Bank, at the end of 2010, the national poverty reduction discount loans were 24.6 billion Yuan, 34.3% up over the previous year.

　　【Preferential policy for poverty alleviation】  1. Continue the implement preferential interest rate policies for trade and production of minority areas to boost the development of trade in minority areas and help minorities to get rich. During the “11th Five-year Plan” period, it practiced the preferential interest rate policy for normal circulating fund loans for designated enterprises engaged in trade and special minority commodity production and provided a total of interest subsidy of 3.409 billion Yuan, which stimulated the issuance of loans of 120 billion Yuan from financial agencies and supported the development of impoverished minority areas.

2. Continue to reinforce the fund support to Xinjiang to promote local development and stability. As of the end of 2010, the People's Bank of China increased agriculture-benefiting loans of 4 billion Yuan for Xinjiang and arranged a total of 1.86 billion Yuan of loans for the rural cooperatives in Xinjiang, ranking first in China. At the end of 2010, the RMB loan balance in Xinjiang stood at 497.3 billion Yuan, up 31.3%, 11.4 percentage points above the national average.

3. Issue preferential financial policies for Tibet to maintain stable economic and loan growth, including preparing and implementing credit schemes for Tibetan currency, implementing preferential interest rate policy and issuing subsidies for Tibet Branch of the Agricultural Bank of China. At the end of 2010, the RMB loan balance in Tibet stood at 30.1 billion Yuan, up 21.6%, 1.7 percentage points above the national average.

4. Timely introduce preferential policies for post-disaster reconstruction of Wenchuan, Yushu and Zhouqu to support the employment and housing of the affected people who fell into poverty due to disaster. After the disasters, the People's Bank of China and other relevant units respectively issued at the first time the "Opinions on Financial Support and Services for Post-disaster Reconstruction of Wenchuan", "Urgent Circular on Financial Services for the Earthquake Disaster Area of Yushu", "Guidance on Financial Support and Services for House Rebuilding in the Areas Hit by Severe Flash Flood and Debris Flow Disaster in Gansu and Sichuan", etc. By increasing the amount of re-lending and issuing special policies of no reminder, no interest penalty and no bad record as well as prime rate loans, it strived to support the post-disaster reconstruction and production of the poor in disaster areas.

5. Develop special policies to support local use of county funds in rural areas and ensure funding for county’s economic development. To strengthen support for counties and impoverished areas, the People's Bank of China and China Banking Regulatory Commission promulgated the "Assessment Methods for Encouraging County Corporate Financial Institutions to Use A Certain Percentage of New Deposits for Local Development (Trial)". Through providing relatively low deposit reserve ratio, preferential interest rate for agriculture-benefiting loans and preferential policies for branch opening and new business operation for eligible financial institutions incorporated in the county, the bank encouraged county corporate financial institutions to support local economic development.

　　【Policy for small-sum secured loans】Give full play to the role of small-sum secured loans to support the people with difficulties in finding jobs and help the poor to shake off poverty and get rich. As of the end of 2010, the balance of small-sum secured loans reached 32.267 billion Yuan, with an increase of 71.01%. Through issuing small loans, it supported a number of capable businessmen and leaders in helping the masses to get rich and supported the poor to shake off poverty by business launching.

　　【Credit policy guidance】  Improve and reinforce the financial services for rural migrant workers, provide good environment to the employment of impoverished people. Migrant work is an important way for poor farmers to improve living conditions and increase income. The People’s Bank of China continued to strengthen instructions on credit loan policies, promoted the “micro secured loans for rural migrant workers”, “return and venture loans for rural migrant workers” and other types of loans, provided convenient loans for rural migrant workers and provided financial aid for them to shake off poverty and launch businesses. Meanwhile, it gradually improved the business management for financial agencies to pay migrant workers and explored the establishment of migrant workers’ salary payment guarantee system, which effectively protected the salary payment of migrant workers and enhanced their enthusiasm for migrant work. As of the end of 2010, branches and sub-branches of the People’s Bank of China collected the delayed salary information of 2,961 enterprises, involving 1.623 billion Yuan and 362,300 people. Since 2006, the People’s Bank of China has provided featured services of migrant workers’ bank cards to provide convenient for allocation of venture capital, cross-city remittance and cash storage of migrant workers. As of the end of 2010, 195 migrant workers’ bank cards were issued and 72,000 offices could provide such services, covering 23 major provinces with a large number of migrant workers. In 2010, the featured services of migrant workers’ bank cards finished 14.05 million transactions, and the value reached 22.102 billion Yuan, respectively up 47% and 32% over the previous year.

　　【Construction of rural payment system and credit system】It is an important prerequisite for improving the quality of life and increase sources of income of the poor to strengthen the infrastructure construction and social services in rural areas including financial services. The People's Bank of China attached great importance to the rural financial system reform, established the multi-level rural financial service system and strengthened the construction of rural payment system and credit system to effectively improve rural financial services and help the rural poor to shake off poverty, live a happy life and build a beautiful home.

1. Promote the improvement of the multi-level multi-agent rural financial service system to steadily increase sources of funding and channels of financial services of rural poor residents. The bank issued and honored the special bills and loans for rural credit cooperatives reform, supported rural cooperatives to achieve initial results in the reform and constantly strengthened its capacity to serve impoverished rural areas and the ability to resist risks. It promoted the reform of Agricultural Bank of China and steadily enhanced the level of "three rural" services. At the end of 2010, the loan balance of the "three rural" Banking Department grew by 26.15%, 7.2 percentage points above that of the bank. It guided the Agricultural Development Bank to continuously expand the area of agriculture-benefiting poverty alleviation, forming a multi-faceted and wide-ranging agriculture-supporting pattern with loan business for purchase of grain, cotton and oil as the main body and industrialized operation of agriculture and long-term rural and agricultural loans as the “two wings”, supplemented by intermediate business. It promoted the pilot retail business loans of postal savings banks to improve the market mechanism for postal saving funds to flow back to the countryside; steadily developed new-type rural financial institutions and small loan companies and guided private capital to support the "three rural" issues and play an active role in helping the poor. By the end of 2010, 395 new-type rural financial institutions had set up nationwide.

2. Continuously improve the payment system in rural areas to enhance the convenience of rural payment. In 2010, the People's Bank supported the financial infrastructure construction in rural areas and guided and supported rural financial institutions to join in the big and micro-payment system and national check image exchange system, creating conditions for the fast and efficient payment and settlement services in impoverished areas. As of the end of 2010, 29,000 rural credit cooperatives, 1,238 rural cooperative banks, 1,164 rural commercial banks and 261 township banks joined in the payment system of the People’s Bank of China, making it convenient for cross-city remittance in rural areas. Relying on the micro-payment system of the People's Bank of China, they started agent business of capital collection and payment in rural areas. Combined with the agriculture-benefiting policy of “home appliances going to the countryside”, in some areas, subsidies were directly used as payments for home appliances and the financial department regularly transferred the subsidies to the dealers through the micro-payment system, which simplified the procedures and facilitated rural consumption payment. The People's Bank of China also launched pilot POS small-amount encashment in some towns not covered by financial institution service, which effectively improved the payment services in remote rural areas. The farmers in the pilot areas could, in such a way, get the government subsidies without leaving the village.

3. Gradually develop the rural credit system to create good conditions for the poor to get more loans. The People's Bank of China constantly improved the rural credit system and achieved the organic combination of government’s preferential agricultural policies and the bank’s credit policy, which promoted the construction of rural credit system and created a favorable financial environment for the bank to actively and steadily issue and collect poverty relief loans. As of the end of 2010, most of domestic areas made records for rural households’ credit and the personal credit information system collected credit files of about 112 million rural households. A farmers’ credit evaluation system was gradually established to conduct credit assessment on more than 80 million rural households, which improved the availability of loans to the rural poor.