Individual investors will be able to buy stakes of two percent
in rural lenders, up from the existing 0.5 percent, as the
government tries to boost rural financing, the regulator said on
Friday.
Zang Jingfan, a senior official with the China Banking
Regulatory Commission (CBRC), said the policy is part of new
guidelines for the reform and opening of its rural cooperative fund
associations - currently the lowest-level organizations in China's
financial system.
The regulator will also allow cross-provincial investment in
rural cooperative fund associations as part of efforts to boost the
development of rural lending, Zang said.
He said investors from outside rural areas are encouraged to
invest in the cooperative fund associations.
Loans from county and village cooperative fund associations, the
country's main channel for rural financing, account for 12.3
percent of China's total outstanding loans balance, according to
the central bank.
"These new policies are expected to encourage more investors to
set up rural cooperative fund associations, which are extremely
lacking in funds," She Minhua, an analyst with CITIC China
Securities, told China Daily.
China has been restructuring the organizations since a push
began in 2003 to improve financial services in rural areas.
Jiang Dingzhi, vice chairman of CBRC, said on Friday that the
regulator is supporting qualified lenders in rural areas to
introduce strategic investors and get listed.
Fifteen rural commercial banks have been established based on
the reform of rural cooperative fund associations. Four of those,
located in Zhangjiagang, Changshu, Wujiang and Jiangyin, all in
Jiangsu Province, plan to launch initial public offerings, the
banking regulator said.
Jiang said the new rural financial institutions should serve the
agricultural sector and rural areas, emphasizing the need for
steady expansion.
CBRC also launched a pilot program last year to encourage
community and foreign funding for financial institutions like
village banks and loan companies.
Chinese farmers and rural companies have few financing channels
for their businesses. Farmers rarely obtain loans above 5,000 yuan,
according to the Xinhua News Agency.
(Xinhua News Agency December 8, 2007)
