Chili growing heats up pace of regional economic development

With credit support, chilies are heating up the economic development of an impoverished county in Northwest China.

Residents of Luonan county, in Northwest China’s Shaanxi province, have always found it hard to make a living due to the county’s remote location and infertile land. But in 2016, Ma Huifeng, who finished school sponsored by local farmers, found a way to help the county out — growing chilies.

He discovered the county’s climate was ideal for growing pod peppers and he decided to promote pepper cultivation among local farmers.

However, his ambition was hindered by a lack of funds to buy pepper seeds.

The local subbranch of the Postal Savings Bank of China Co Ltd, a large Chinese retail bank, lent Ma 150,000 yuan ($22,000), enabling him to change the course of his and many local farmers’ lives.

That year, 33.18 hectares of pod peppers were planted, benefiting 53 households.

Two years later, the area increased to 1,335.46 hectares, raising the problem of a lack of funds again — a shortfall of 4.2 million yuan to build new production lines.

This time, the subbranch got in touch with Ma, negotiated with the local government to include his business in its program of industrial loans for poverty alleviation, and provided the loan within a week of getting in touch with him.

With the loan, the peppergrowing business thrived, raising the annual incomes of 7,800 households by more than 10,000 yuan each on average.

“Luonan county has 243 villages in total, and the peppergrowing industry has benefited 196 of them, or more than 20,000 people,” Ma said.

Similar events have taken place across the country. PSBC has customized financial services for impoverished areas in Shaanxi, Shandong, Jiangxi and Anhui provinces to cultivate local industries and reduce poverty.

The services are part of PSBC’s poverty alleviation model driven by promoting one featured industry, or a sustainable income source, in each impoverished county, said Shao Zhibao, vice-president of the bank, at a news conference on Aug 2.

To realize this goal, the company has done more than just lend money.

For instance, PSBC has collaborated with other institutions in the China Post Group to help farmers facing difficulties in shipping and selling their agricultural products. Such goods can be sold on ule.com, an e-commerce platform under the aegis of China Post Group, and be shipped by the China Postal Express & Logistics Co Ltd, according to Shao.

Shao said PSBC has also introduced more than 120,000 farmers to new agricultural techniques by cooperating with the China Association for Science and Technology, the country’s largest NGO of scientific and technological professionals. The techniques can help disadvantaged farmers generate income and thus repay loans, reducing bank credit risks.

PSBC’s poverty alleviation strategies are in accordance with the country’s goal of lifting all poor rural residents out of poverty by 2020, as well as the banking and insurance regulator’s instruction for banks to help develop industries with competitive advantages in impoverished areas to foster long-term growth momentum.

The China Banking and Insurance Regulatory Commission requested that banks providing services for rural residents guarantee this year’s growth speeds of industrial and small loans for poverty alleviation to be higher than the average growth speed of all types of loans.

in Luonan county, Shaanxi province, have benefited from the pepper growing industry

Zhou Lanxu and Xu Shuyue contributed to the story.