Jingning farmers lifted out of poverty thanks to free loans

Ren Zhouku, from Sige Village, Chengzhao Town, Jingning She Autonomous County received a100,000 yuan interest free loan to upgrade his goat farm. “I didn’t spend a dime of my own building the new sheepfold, and with the loan I also contracted 40 mu of land to grow hay to feed the goats.”

Ren was able to do all this for free thanks to a special program in Jingning, which provided interest free microloans to low-income farmers in the county. Ren was among the first group to benefit from the program since it launched in 2011. He took out a 30,000 yuan loan to repair the pen and breed goats. So far, Ren bred 200 goats and his annual income reached more than 100,000 yuan.

In 2011, Jingning was listed as one of the six most underdeveloped counties in Zhejing Province, and received a poverty fund of 600 million yuan over three years, 13 million yuan of which directly went to low-income farmers. “If the money got equally split then each poor farmer would get less than 715 yuan, and it wouldn’t have brought the farmers any sustainable benefits,” said Mao Qinghua, farmers’ office director of Jingning County.

In order to let the fund benefit more people, the county implemented rural financial reform, explored a new way to combine the local government, the bank and the insurer together to offer free microloans to low-income farmers. The government purchased loan insurance and paid for the interest, while the financial institution issued loans to farmers.

The first loan program ended in September 2014. By the end of 2015, a total of 56.7 million yuan was issued to 1,970 households with zero defaults. The program largely increased the efficiency of the poverty alleviation fund.

As the first program was a big success, the county set out to lift more people out of poverty, and included nearly one third of Jingning’s farmers in the next program. It also raised the annual interest free scale from 3 million yuan to 13 million yuan. So far, the second program operated successfully, and a total of 149 million yuan of loans were issued to more than 2,500 farmer households.

“For us, the financial risk has been reduced as low-income farmers receive capital and motivation to work as entrepreneurs.” According to Chen Xiaoling, Chairwoman of Jingning Rural Credit Cooperative Union, the cooperative introduced several types of loans such as three-year loans, pay-as-you-go loans, and revolving loans. It also issued special credit cards to farmers, providing assistance and services.

Sun Shanzong, a villager from Tangbei Village, Dongkang Town was lifted out of poverty thanks to the loan program. “Now I plan to double the size of my production base, and I will even consider creating my own brands in the future.” Sun was just a mason two years ago and doing odd jobs to get by. With a 50,000 yuan loan from the bank, Sun started growing tea plants, and his gross annual income now reached 60,000 to 70,000 yuan.