Tailored financial services in rural areas of Anhui help lift locals out of poverty

If it was not for the 30,000 yuan ($4,440) loan from a local bank two years ago, Zhao Yali would not have become the head of a bamboo cooperative in Gouya, an impoverished village in East China’s Anhui Province.

“I never thought I could borrow money from a bank,” Zhao said.

Gouya is well known for its bamboo products. Almost every villager is a skilled bamboo craftsperson, but for years, they were unable to turn their skills into profit without money to buy raw materials and processing equipment. This trapped the village in a cycle of poverty for decades.

All that changed for Zhao in late 2016 when she managed to get a loan from a local bank.

The micro loan, aimed at helping the poor develop their own businesses and increase incomes, is offered to registered disadvantaged households without requiring any guarantee or mortgage.

In Zhao’s case, she could apply for a collateral-free loan from the bank at the benchmark interest rate on a threeyear term, with an interest rate subsidy provided by government poverty alleviation funds.

That year, Zhao made a net profit of 5,000 yuan by selling bamboo brooms. In early 2018, she set up a cooperative, recruited residents from 18 households living under the national poverty line – per capita annual income of 2,300 yuan – and sold their products online.

Now, Zhao can earn about 20,000 yuan a year, while her workers can make about 100 yuan a day.

China has set 2020 as the deadline for building a moderately prosperous society.

To achieve this goal, China, the world’s most populous country, needs to lift around 30 million poor residents out of poverty in the next three years, most of whom live in rural areas.

Nearly 20 households in Gouya have used the loans as start-up funds to develop their bamboo-related businesses.

According to Jiang Hong, head of the local provincial poverty alleviation office, Anhui had issued more than 27 billion yuan in micro and small loans to poverty alleviation programs by the end of June.

The number of people living under the national poverty line in the province dropped from 6.8 million in 2012 to 1.2 million in 2017.

Similar financial support policies have also been carried out in many other provinces and regions across the country.

It has undoubtedly become an important measure for impoverished Chinese residents to increase their incomes.

To help rural households get loans, a risk compensation fund system has also been established to direct more financial resources to impoverished areas and people.

Across the country, a total of 470 billion yuan worth of small loans were issued to nearly 19 million registered poor households between late 2014 and May this year, according to Hong Tianyun, deputy director of the State Council Leading Group Office of Poverty Alleviation and Development.