Credit system assists poor farmers in efforts to operate their own businesses

A small loan was the starting point for Yang Xilun, a villager in Anhui province, in his fight against poverty.

Thanks to a credit rating system established by Jinzhai county in the province, he received a loan for the first time in his life of 5,000 yuan ($726) in 2017. Before that, Yang lived in poverty with his parents, who suffered from mental retardation and poor health.

With the money, Yang invested in a photovoltaic power station in his home village, earning him 3,000 yuan per year. He also started a chicken farm in 2017 to feed his six-member family.

In 2013, Jinzhai county started to explore a credit rating system for poverty-stricken villagers based on information about their family, assets and business credit.

In 2018, Yang paid off his first loan before it was all due, earning him the highest credit rating in the system's credit file. He continued to expand his business with more loans and earned more than 40,000 yuan in 2019.

Anhui province promoted the credit rating system in 337 villages in 2019, of which 60 were poverty-stricken.

"Besides assets and other resources, moral evaluation among villagers is also an important factor of the rating system," said Zhang Ming, an official with the provincial organization department.

"Good credit helps me make a good fortune," said Fang Hengtian, another villager in the county, who earned 70,000 yuan in 2019 by planting traditional Chinese medicinal herbs such as gastrodia elata thanks to the loans granted through the credit rating system.

"The big data application combining financial services and farmers' credit can provide effective financial support for poverty alleviation," Zhang added.

Zhang Hao, president of Jinzhai Rural Commercial Bank, said more than 11.7 million yuan in loans for poverty alleviation have been paid off when due since 2016.

The data from the bank showed that the credit system has benefited 358,600 poverty-stricken village households in the province by the end of 2019.