Lending: Banks join drive to help the poor

bank lending. That to small and micro-enterprises was 789.88 billion yuan, up by 11.48 percent from a year earlier.

Meanwhile, lending for targeted poverty reduction was 15.58 billion yuan, up by 178.02 percent year-on-year, according to the PBOC’s branch in Fuzhou.

Shan Qiang, president of the branch, said, “Development of financial inclusion and increase in financial support for poverty-stricken areas constitute the most effective way to support the development of real economy, which is one of the important measures to reduce poverty.”

According to a central bank report, total outstanding loans for targeted poverty reduction rose to 2.49 trillion yuan as at 2016-end, up by 49 percent from 2015, compared with 28.2 trillion yuan in loans for agricultural activities, a growth of 7.1 percent year-onyear, and 20.8 trillion yuan in loans for small and microbusinesses, a growth of 16 percent year-on-year.

This year, the PBOC will cut the cash amount that needs to be set aside as reserves, or the required reserve ratio, by some financial institutions that have extended loans to support small and micro-sized sand agriculture.

This policy will offer commercial banks targeted RRR cut of 0.5 to 1.5 percentage points if their annual outstanding loans or new loans in inclusive finance reach certain requirements.

The three-day Central Economic Work Conference, which concluded on Dec 20 last year, has targeted “poverty reduction” as one of the three policy priorities in the next three years.

Yi Gang, the central bank’s vice-governor, reiterated recently that development of inclusive finance can help in achieving the “final victory” in the country’s poverty reduction battle, which will be one of the primary tasks of the PBOC in 2018.

“China has made significant progress in financial inclusion ,” said the IMF in a report, after it assessed the country’ s financial sector performance during the past five years. “High levels of account penetration, savings, and usage of payments services have been achieved.”

The IMF recognized that the financial system has facilitated China’s high growth rate and the consequent sharp decline in poverty rates. “The sector now reaches most of the population, as evidenced in financial inclusion measures, and permeates virtually all aspects of economic activity,” it said.