Financial services help Guangxi border city flourish

Seizing the opportunity created by the financial-reform border pilot zone, Dongxing, the only Chinese city with both land and sea borders with ASEAN countries in the south of Guangxi Zhuang Autonomous Region, guided financial institutions to innovate cross-border trade poverty alleviation products and services to help local impoverished people out of poverty.

According to related regulations in Guangxi, each impoverished person taking part in cross-border trade can obtain a guaranteed and collateral-free loan of up to 100,000 yuan (U.S. $14,790) in under three years. With interest subsidized by local government, each impoverished household took out a 50,000-yuan (U.S. $7,395) loan, enabling them to get directly involved in a mutual-help group and to earn an annual income of 30,000–40,000 yuan (U.S. $4,437–5,916). For those who did not have the capacity to get directly involved, they could entrust the loan to one of the groups and receive an annual dividend of 8%, i.e. 4,000-yuan (U.S. $592) plus a monthly of 300 yuan (U.S. $44.37), which makes a total of 7,600 yuan (U.S. $1,124). With the dividends and free driving lessons paid for by the government, the group can purchase vehicles and distribute them to impoverished households for transportation business. Impoverished households could also entrust theirs to the group for operation.

He Yiyuan is an impoverished resident of Jiangna Village of Dongxing Town. With the poverty alleviation loan, he joined a mutual-help group, from which he receives a monthly salary of more than 4,400 yuan (U.S. $651); and with the dividend, he bought a car for transportation in and out of the port.

In addition, with interest subsidized by local government, each group member can take out a 20,000-yuan (U.S. $2,958) credit extension loan while the group can obtain a 1-million-yuan (U.S. $147,900) credit loan from authorized financial institutions. Additionally, able impoverished people can get a guaranteed and collateral-free loan of up to 50,000 yuan (U.S. $7,395) in under three years.

Meanwhile, Dongxing also vigorously promoted cooperation between banks and enterprises. Providing a monthly-interest subsidy of 200,000 yuan (U.S. $29,580), Dongxing Jinghua Industrial Company borrowed 36 million yuan (U.S. $5.32 million) from Guilin Bank to support the groups in conducting border trade. They can use it either to run businesses, or to buy shares with tax exemptions and receive dividends.

With an annual income increase of more than 7,000 yuan (U.S. $1,035), the “cross-border + financial services” poverty alleviation model in Dongxing has benefited 442 impoverished people, and the mutual-help groups are growing stronger.