Posts Tagged ‘China Development Bank’

Agricultural Bank Offers CFPA Microfinance RMB 200 Million Wholesale Loan

Posted in MF Marketplace on October 20th, 2009 by Yam Ki – 4 Comments

According to a Sohu Article, the Agricultural Bank of China (ABC) has offered CFPA Microfinance a 200 million yuan wholesale loan.

Based on my research of CFPA Microfinance, this will be CFPA Microfinance’s third wholesale loan agreement.  The first was with the China Development Bank back in December 2006 for 100 million yuan and the second was a revolving credit facility with Standard Chartered Bank in January 2008 for 20 million yuan.

Such wholesale loan agreement is a win-win for both parties.  CFPA Microfinance gets additional funds to expand its loan capital and ABC meets the three agricultural dimensions policy loan requirement (三农) mandated by the government.  Moreover, ABC doesn’t have to waste its time making microfinance loans on its own, which it has done poorly in the past.  Depending on how much leeway ABC with its auditors on how to classify the loan (whether it is considered to be implicitly government backed), it may only need to be put up minimum capital reserve requirements.

This agreement not only increases CFPA Microfinance’s loan capital, it solidifies the MFI’s lead in China’s microfinance sector.

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