Archive for June, 2009

First Small Loan Company Registered in Xinjiang

Posted in Finance Policy, Xinjiang on June 27th, 2009 by Yam Ki – Be the first to comment

I came across an interesting press release about a set of Small Loan Companies (SLCs) that just got registered in Urumqi, Xinjiang this morning.

The Uyghur Autonomous Region Government issued a pilot test program guideline for SLCs in February 2009. A total of 11 firms applied to register and 5 were provided the license. The largest is Huachun Small Loan Company (华春小额贷款股份有限公司), the focus of the press release.

A few facts of particular interest from the press release that I noticed were: read more »

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Microfinance–Everyone is doing it!

Posted in MF Marketplace on June 25th, 2009 by Yam Ki – Be the first to comment

Everyone is getting excited about microfinance in China. What’s there not to like? It’s “micro” (aka grassroots and chic) and its finance (yay, money!). If someone can win a Nobel Peace prize for it, it has to be good right?

Photo Credit: FXCaliber

Photo Credit: FXCaliber

The Chinese government is so eager about it, it has tried to promote it (by my count) seven different times: Rural Credit Cooperatives, Agricultural Development Bank loans, Microcredit Companies, Village Banks, Rural Mutual Credit Cooperatives, Small Loan Companies, and Postal Savings Bank loans.

The private sector is also excited with thousands of registered guarantee companies and small loan companies. Not to mention the hundreds of companies registered with consulting / management licenses that engage in lending-like business model.  With the latest round of government push for microfinance to help the rural poor and the unemployed, even web entrepreneurs are jumping in for some action.  Many of these online sites are throwing around the word “microfinance” along with “P2P lending” and “social responsibility” for added chic.

But are they really microfinance? read more »

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Banking on an Exit for Small Loan Companies

Posted in Finance Policy on June 19th, 2009 by Yam Ki – Be the first to comment

CBRC

Today, the China Banking and Regulatory Commission (CBRC) released a directive on converting Small Loan Companies (SLCs / 额贷公司) to Village Banks (VBs / 村镇银行).  It seems that the explosion of SLC and related credit over the past year is making the CBRC a little nervous.  According to the press release for the directive, as of March 2009, there are already 583 SLCs opened and another 573 in preparation.

Institutionalized in May of 2008, the SLCs were People’s Bank of China (PBoC) and CBRC’s attempt to reinvigorate read more »

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