Loan scheme helps Ti­bet’s small busi­nesses grow

Credit rat­ing pol­icy rolled out by Agri­cul­tural Bank of China has al­lowed farm­ers to ex­pand their oper­a­tions and in­crease an­nual in­comes

China Daily (Canada) - - FRONT PAGE - By JIANG XUEQING in Lhun­zhub county, the Ti­bet au­ton­o­mous re­gion jiangx­ue­qing@ chi­nadaily.com.cn

Jampa Norbu lives in a vil­lage in Lhun­zhub county, which is 60 kilo­me­ters away from Lhasa, the cap­i­tal of the Ti­bet au­ton­o­mous re­gion. He has a fam­ily of seven, 8.24 acres of land and nine cat­tle. Most of the fam­ily’s in­come comes from farm­ing high­land bar­ley and wheat.

In 2011, he took out a three­year loan of 30,000 yuan ($4,830) from the Agri­cul­tural Bank of China Ltd to buy farm ma­chin­ery. Ever since, his in­come has in­creased 20 per­cent an­nu­ally on av­er­age to 60,000 yuan.

Af­ter he paid it off last year, he ap­plied for another loan of up to 200,000 yuan. Jampa Norbu hopes to use the­money to buy 15 more cows and build a cat­tle farm along with three poverty-stricken fam­i­lies, who will work with him.

“I ex­pect to re­cover the in­vest­ment in two years by selling more than 9.7 liters of milk a day as well as breed­ing calves,” he said. “The gov­ern­ment also gives us fod­der sub­si­dies of more than 1,000 yuan per cow per year.”

Back in 2003, the Agri­cul­tural Bank of China Ltd, the na­tion’s fourth-largest len­der by as­sets, in­tro­duced a “char­ac­ter loan” ser­vice in Ti­bet.

Lo­cal bank of­fi­cials visit each fam­ily in the re­gion and con­duct a sim­ple sur­vey. This in­volves their fi­nan­cial sit­u­a­tion, their rep­u­ta­tion and busi­ness prospects.

With the help of the vil­lage chief and town­ship gov­ern­ment, the bank rates each house­hold’s credit at dif­fer­ent lev­els.

The fam­i­lies that are granted a top-level “diamond card” can ap­ply for loans of up to 200,000 yuan, at the poverty alle­vi­a­tion rate of 1.08 per­cent, with­out putting up col­lat­eral. Those fam­i­lies re­ceiv­ing the low­est-level “bronze card” are al­lowed to bor­row no more than 20,000 yuan.

“Be­fore the bank in­tro­duced the ‘char­ac­ter loan’ ser­vice to Ti­bet, it was hard for many farm­ers in this re­gion to re­ceive bank loans be­cause they lacked suf­fi­cient col­lat­eral,” He Qin, head of Lhun­zhub county sub-branch of Agri­cul­tural Bank, said.

Ob­vi­ously, some of the loans bor­rowed by farm­ers and herders are of­ten small, just 1,000 yuan, ac­cord­ing to Mig­mar Wangdu, man­ager of Agri­cul­tural Bank’s Ti­bet branch.

“This makes it cost-in­ef­fec­tive for the bank to con­duct pre-loan in­ves­ti­ga­tions and post-loan re­views for each one,” he said.

Twelve years af­ter it was launched, 95 per­cent of the fam­i­lies in Ti­bet have a “char­ac­ter loan” card. As of June 30, the out­stand­ing char­ac­ter loans in the re­gion were more than 15 bil­lion yuan.

They have been used to ex­pand tourism ser­vices, buy ma­chin­ery and even fi­nance con­struc­tion projects. The non­per­form­ing loan ra­tio of Agri­cul­tural Bank’s Ti­bet branch was only 0.49 per­cent by the end ofMay.

“Apart from as­sess­ing the credit of each fam­ily, we also con­ducted credit eval­u­a­tion on towns and vil­lages to con­trol risks by en­cour­ag­ing timely loan re­pay­ments,” Mig­mar Wangdu said.

“The res­i­dents in those towns and vil­lages that do not have non­per­form­ing loans will see their credit rat­ing rise.”

A large num­ber of res­i­dents have de­vel­oped their own busi­nesses and in­creased their fam­ily in­comes with the sup­port of Agri­cul­tural Bank. Last year, the an­nual in­come per capita in Lhun­zhub county jumped to more than 6,000 yuan, up 1,700 yuan from 2013.

As a driver for the lo­cal com­mis­sion for pol­i­tics and law in Kyurong vil­lage, Lhun­drub county, Solang Norbu used to make 4,000 yuan a month. The 44-year-old bor­rowed 150,000 yuan from Agri­cul­tural Bank in 2012 through the “char­ac­ter loan” pro­gram.

He then founded a co­op­er­a­tive along with 19 other fam­i­lies to raise 220 Ti­betan chick­ens.

Each Ti­betan chicken egg, which is be­lieved to be more nu­tri­tious than those from other birds, is sold for 3 yuan. The price is­much­higher, com­pared with 0.8 yuan for an egg in Bei­jing. The co­op­er­a­tive made a net profit of 30,000 yuan last year.

Now, SolangNorbu has paid off two-thirds of the loan and has ap­plied for another one. He hopes to bor­row 400,000 yuan to ex­pand the busi­ness, us­ing his salary as col­lat­eral.

His plan is to buy an in­cu­ba­tor that can hatch 2,200 eggs. This will in­crease his chicken pop­u­la­tion, which will help the op­er­a­tion to grow.

“I hope to sell Ti­betan eggs to in­land cities like Bei­jing,” he said.

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