Initial achievements

As the campaign forges ahead, many farmers have benefited. In Zhongping Village in Guangxi's northwestern Baise City, for instance, convenient financial services brought by bank outlets, ATMs and other self-service facilities have propelled the cultivation of chives, one of the community's pillar industries.

"Most farmers in our village have the Huinong card issued by the Agriculture Bank of China (ABC) that enables us to purchase fertilizer and seeds more easily," said Huang Xinhong, a chives grower. "And, more importantly, we can apply for loans with the card."

Despite these efforts, the development of banks in rural China is far from being fast enough. For a long time, financial services in rural areas have faced a crisis of survival, as most commercial banks prefer to do business in the cities, where profits are high and risks and management costs are low.

In June, Rural Credit Cooperative in Dahua Yao Autonomous County in Guangxi Province opened three new outlets. As its revenue failed to cover its costs, the cooperative posted a 800,000 yuan loss.

"We granted 12 million yuan in loans but took in only 3 million yuan in deposits since we opened," said a manager who declined to be identified.

Jiang Shengyong, director of Institute of Economics in Guangxi Development and Reform Commission, said that a solid and systemic support mechanism is essential for a financial institution.

"It is time for the government to allocate funds to support the development of rural finance," he said.

Nong Chengqun, director of the ABC's Guangxi branch, called on the government to establish policies to support rural financial institutions.

The government could, for example, lower the deposit reserve ratio and business tax rates.

"As a bank's costs of operation in a remote, mountainous area are much higher than in cities and towns, the government should adopt policies to ease the burden of banks' operating in the countryside," he said.

(Xinhua News Agency September 23, 2010)