More banking access in China’s rural areas

by Richard Kilner

Story link: More banking access in China’s rural areas

The vacuum of banking in China’s rural sector is to be filled by large banks and agricultural firms expanding into the sector.

Vincent Cheng Hoi-chuen, HSBC’s executive director, has indicated that the bank has increased its capital fourfold for its first rural bank, and intends to open more.

Its initial rural bank operates in Suizhou, Hubei Province, with capital of 10m yuan.

According to Cheng HSBC has been speaking with New Hope Group’s chairman Liu Yonghao.

The Group is one of the largest agricultural firms in China.

Liu has stated that he wishes to collaborate with other financial institutions in setting up a range of deposit companies, funded to the tune of 100m yuan.

The companies will act to enable rural dwellers to gain loans from banks, though Liu has admitted that the biggest difficulty the plan faces channelling loans into the rural areas.

Earlier, Chinese Premier Wen Jiabao released a report calling for greater financial development in rural areas.