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Highlight on China, Part 2 - Interview with IPC

Partnering with financial institutions to take microfinance into rural China
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As part of the Microfinance Gateway Highlight on China, Part 2: Financial Service Providers, four interviews were conducted with financial service providers to gain their insight on the current microfinance landscape in China. This interview provides the perspective of Ms. Carol Reichelt, Project Manager at International Project Consult GmbH, on the current microfinance landscape in China. Ms. Reichelt states that:

  • The China Development Bank Microfinance Project (CMFP) has two components:
    • Provision of on-lending funds to selected partner financial institutions (PFIs) to enable them to on-lend to medium and small-sized enterprises (MSEs);
    • Provision of technical assistance to PFIs in the form of training staff, and developing procedures and products tailored to the requirements of the target group.
  • Eight PFIs located in eight provinces across China are involved in the project;
  • 16,000 loans totaling $130 million have been disbursed, with $ 85 million outstanding to around 13,000 clients;
  • Over 450 microcredit staff have received training;
  • The project will maintain cost efficiency and portfolio quality by:
    • Increasing standardization of products and procedures;
    • Establishing rigorous internal controls;
    • Closly monitoring through a dialogue between the CMFP and the PFIs.
  • The challenges include:
    • Government intervention;
    • Flux in management systems;
    • Re-organizing of PSI staff and re-defining development strategy and market image;
    • Controlling costs while ensuring adequate marketing;
    • Developing qualified MSE credit staff;
    • Ensuring adequate internal control.

The interview concludes with a brief discussion on how CMFP compares with other projects that International Project Consult GmbH has conducted in Eastern Europe.

About this Publication

By Reichelt, C.
Published