Promoting prosperity via microfinance

Poverty alleviation microloans are special credit products that are tailored to impoverished households so that they can pursue entrepreneurial endeavors. The loans are lent at little or no interest and do not require collateral. Up to 50,000 yuan (US$7,143) can be borrowed for a period of three years.

Villagers benefit from microfinance

A man named Zhu Daohua lives in rural Chongqing and works as a poultry farmer. He feeds his chickens and ducks, gives them water, and checks their physical conditions shortly after he wakes up every morning.

"A poverty reduction microloan made it possible for me to buy a chicken coop and raise chickens and ducks,” he explained. “I am confident that I will escape from poverty.”

Zhu lives with his family in Jianshe village, Qingxi town, Fuling district, Chongqing municipality. His wife suffers from chronic diseases, and their two children are students. Their lives were difficult before they became involved with microfinance.

Special policies in Fuling and other areas make it possible for poverty-stricken people to apply for interest-free loans that do not require collateral. The Zhu family obtained a 40,000-yuan (US$5,714) loan in April 2019 so that they could start their poultry operations.

The family achieved 15,000 yuan (US$2,143) of per capita net income in 2019. “We are able to get good prices for the chickens and ducks that we raise and are confident about the future,” Zhu exclaimed.

In 2017, an impoverished resident of Qunying village, Qingyang town, Fuling district, Chongqing municipality named Zeng Ming got a 40,000-yuan (US$5,714) loan and used the money to buy 40 piglets. He was raising 80 pigs by 2019. His family is becoming more and more prosperous as their operations expand.

Targeted microfinance in Fuling district

In 2019, government bodies in Fuling district began to engage in targeted lending and standardized management in order to prevent risk and minimize the problem of overdue loans. Impoverished households are encouraged to apply for loans so that they can start their own businesses, which is an important part of achieving quality poverty reduction.

Local officials help impoverished households improve and develop their business plans as necessary and encourage them to apply for microloans. Five different banks offer this kind of lending in Fuling. Eligible households can choose to borrow from the one that best matches their needs and locations. The town-level governments in Fuling district screen impoverished people between 18 and 65 years old that meet microloan conditions by performing field inspections of their businesses and make sure that they will achieve adequate profit.

It is important to make people aware of microfinance and disseminate information about it. Local governments are responsible for maintaining a comprehensive understanding of microloans, issuing assistance cards, and visiting people who take out the loans in order to assess the health of their businesses, their ability to repay their loans, and any other potential risks. Poverty alleviation officials’ duties are becoming more comprehensive.

The Fuling government has created two microfinance supervision teams. The teams help towns and lending outlets that are lagging behind in their obligations address their problems by holding meetings, listening to reports, becoming familiar with their data and practices, and using other approaches in order to help address any difficulties on the spot. Microfinance work has also been included in assessments of poverty alleviation officials in towns and district-level departments in order to ensure that the undertaking is fruitful and effective.

In 2020, the Fuling government’s microfinance department will focus on the issue of overdue loans. It will strengthen cooperation between banks and government bodies, consolidate the supervision of lent funds, update and improve account information,  support tasks related to loan repayment and renewal, and ensure the steady progress of poverty alleviation via microcredit.