China’s banking regulator has flagged continued financial support for the central government’s push for greater development in the country’s rural areas.
On 12 October the China Banking and Insurance Regulatory Commission (CBIRC) announced the release of the “Notice on the Banking and Insurance Sectors Providing High-quality Service to Rural Village Revival in 2021” (关于2021年银行业保险业高质量服务乡村振兴的通知).
CBIRC outlined work requirements for the Chinese banking and insurance sectors providing their services to rural villages across eight areas including:
- Optimizing financial services supply systems and service mechanisms,
- Strengthening the supply of financial products in key areas,
- Raising the quality and efficiency of county-level financial services,
- Strengthening the development of rural village credit systems,
- Employing the protective role of insurance,
- Innovation of financial products and services,
- Supporting and consolidating the results of poverty alleviation work and dovetailing it with rural village revival,
- Strengthening differentiated regulatory assessments.
Other focal points of the Notice include:
- Calling for further strengthening of the position and service focal points of various financial institutions, endeavouring to raise differentiated competitive capability, and establishing a services system with clearly differentiated tiers and mutually complementary advantages. CBIRC said it will “encourage banking sector financial institutions to establish internal organisations to service rural village revival,” as well as “encourage banks to provide policy preferences to rural village revival in the areas of loan examination and approval procedures, credit authorisations and product research and development.
- Require that the banking and insurance sectors expand credit and insurance service provision with a focus on the key areas confirmed by the central government rural village work meeting. This will include preferential support for national grain production, helping to make up for shortcomings in agricultural and rural village infrastructure, and innovation in servicing new forms of agricultural businesses, rural households and rural migrants to the city.
- Encouraging the banking and insurance sectors to strengthen the application of fintech and digital technology to agricultural finance. CBIRC called for “increasing the efficiency of credit provision to long-tail customers in rural village areas, as well as raising the digtiziation and smart operations level of rural insurance.” The banking regulator also wants “further widening of the scope of collateral for agricultural loans; the establishment and improvement of rural property rights collateral registration and circulation systems, and compensation mechanisms for rural loan risk.”