Harbin Bank, a commercial bank headquartered in the Chinese province of Heilongjiang, has designed a mobile operation to facilitate access to finance for farmers. A three-vehicle fleet, which consists of an armored jeep accompanied by a police car and a mobile loan station, carries some CNY 10 million (equivalent to USD 1.54 million) in bank notes to rural locations.
“Farmers prefer cash,” said Che Dawei, a manager with the bank. “We tried to distribute bank cards for security and convenience, but they would withdraw cash immediately. They love the feel of bank notes.”
Each loan officer is responsible for 1,100 to 1,200 accounts, with family finances and assets probed before loan disbursement. But the villages as a whole are also the subjects of risk assessment. The bank assigns every village a credit rating and groups of five families form a mutual guarantee mechanism to receive credit.
The English-language newspaper China Daily reported that Harbin Bank had loaned a total of CNY 28 billion (equivalent to USD 4.3 billion) to 1 million farmers by the end of 2010. The ratio of nonperforming loans was cited at 0.67 percent.
By Carol Kim, Research Associate
About Harbin Bank: Harbin Bank is a commercial bank headquartered in the Heilongjiang province of China. Established in 1997, Harbin Bank operates eight branches with 144 business outlets and 5 “village-town” banks. At the end of 2009, it reported total assets of CNY 84.5 billion (USD 13 billion), deposit balance of CNY 75 billion (USD 11.6 billion) and loan balance of CNY 43 billion (USD 6.6 billion).
Sources and Additional Resources:
China Daily: “Cash Caravans Bring the Bank to Villagers”, June 2011, http://www.chinadaily.com.cn/cndy/2011-06/16/content_12708505.htm
MicroCapital.org: “MICROCAPITAL BRIEF: Observers: Chinese Government Should Help Foreign Investors Navigate Microfinance Sector”, May 16, 2011, https://www.microcapital.org/microcapital-brief-observers-chinese-government-should-help-foreign-investors-navigate-microfinance-sector/
MicroCapital.org: “MICROCAPITAL BRIEF: Book From Asian Development Bank (ADB)—Rural Finance in Poverty-Stricken Areas in the People’s Republic of China—Suggests Reform of China’s Microfinance Industry”, February 4, 2011, https://www.microcapital.org/microcapital-brief-book-from-asian-development-bank-adb—rural-finance-in-poverty-stricken-areas-in-the-peoples-republic-of-china—suggests-reform-of-china’s-microfinance-in/
MicroCapital’s Universe Profile: Harbin Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Harbin+Bank
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