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First Foreign Microfinance Firm Set up in Sichuan

MicroCred Nanchong, the first wholly foreign invested company in China offering microfinance services, has started trial operation in Nanchong City in the southwestern Sichuan Province.

The bank with an aggregate investment of 55 million yuan (about US$7.37 million) from MicroCred SA of France, International Finance Corporation, FW Bankengruppe of Germany and American International Group, targets small firms, rural households and self-employed businessmen.

Its financial services range from credit loans to secured loans to mortgage loans. The loans vary between 5,000 yuan and 75,000 yuan (US$670 to US$10,054) at a monthly interest rate of 1.1 percent. The minimum loan period is three months while the maximum is 18 months.

MicroCred Nanchong sources said that its financial services were not available to individuals. More outlets and services were possible if the trial operation went smoothly.

As the unprecedented business model was still nascent, MicroCred Nanchong is not allowed to take deposits and has yet to acquire the license required for financial institutions. The Nanchong Bureau of the China Banking Regulatory Commission, however, is responsible to guide and supervise its operation.

MicroCred Nanchong has secured a business license from the Sichuan Provincial Bureau of Industry and Commerce to start the trial operation.

(Xinhua News Agency November 6, 2007)

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