Highlight on China, Part 4 - Interview with the People’s Bank of China, Research Bureau

Publication Date: Oct 2007
Published by: Microfinance Gateway
Document Type: Web Publication (PDF)

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How has the People’s Bank of China forwarded the cause of microfinance?

As part of the Microfinance Gateway Highlight, Highlight on China, Part 4: The Policy Perspective, three interviews were conducted with regulators and policy-makers in China to gain their insight on the current microfinance landscape in China. This interview provides the perspective of Mr. Jiao Jinpu, Deputy Director of the Research Bureau at The People's Bank of China.

Mr. Jinpu states that:

• The Chinese Government’s rural reform policy aims to:
  • Provide a stable macro-economic and policy environment for rural finance;
  • Open up the rural financial market;
  • Build a prudent regulatory system overseeing rural finance.
• The Government plays a crucial role in promoting microfinance by acting as:
  • The policy maker for the microfinance sector,
  • The policy formulator for microfinance institutions (MFIs);
  • The direct actor to promote the development of MFIs and projects.
• The motivation behind PBOC’s commercial microlending institutions pilot program are:
  • To encourage private institutions to seek innovations in organizational management, financial instruments, and risk management techniques;
  • Take advantage of the existing private savings and community information to expand the development of commercial microlending and bring capital back to rural areas;
  • To aid reforms to liberalize the rural financial market and control risks.
• PBOC’s pilot program has borrowed experiences and lessons from international microfinance, and also has unique features designed to suit Chinese circumstances.
• Some of the urgent issues that need to be addressed in China are:
  • Improving lending efficiency and enhancing credit risk management;
  • Establishing a competitive market;
  • Solving the lack of sustained funding for commercial microlending institutions;
  • Enhancing regulatory capabilities on rural finance.