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Affordable financial services for the poor

chinagate.cn by Zhang Ling, March 25, 2016 Adjust font size:

Poor households from the Ningqiang County in northwest China's Shaanxi Province recently won support from the local government and local banks to relocate during a public service campaign to tackle poverty, bank.hexun.com reported.

According to the local government, they explored new approaches to housing demolition and relocation. The coordination between banks, government, and community could ensure consistent and adequate funding for a poverty relief initiative.

The need-based financial aid means the impoverished population in Ningqiang would benefit from long-term financial support with a reduced interest rate residency and relocation loan.

Late last year, a finance company focusing on poverty reduction and development was set up to offer a wide range of options for locals. The company has a credit limit of 760 million yuan (U.S. $117 million).

The company's rules dictate that the loan is to be used primarily for housing demolition, relocation compensation, nonrecurring transition costs, and the construction of housing and supporting facilities. People who apply for the loan won’t be required to pay interest while their relocated house is under construction.

Currently, the loan totals 340 million yuan (U.S. $52 million), covering 6,000 relocated households; 67 percent of Ningqiang’s impoverished population has been benefited from the loan.

Because the costs of housing construction, housing demolition, and relocation are far beyond their means, people can use an installment plan.

Statistics released by the local government explained that 402 relocated units or households have applied for the installment payment and that 1,407 poverty-stricken people have benefited from the plan.

In addition, a business loans will be available to the people as they settle down. Self-employed people and local enterprises can both apply for the loan. Compared with the house payment loan, the business loan is easier to get and has a lower interest rate and more flexible time limit.