Program Summary

Micro-credit plays a crucial role in developing local economies and individual’s economic situations helping improve their social welfare. The lending is complemented with skills training, market information and other support to the individuals along with supporting the development of local women’s groups who can give sustained support rural women’s income generating initiatives. The program is a combination of financial and social support with significant impacts.

Why we are doing it?

Only 60% of the more than 120 million rural households needing loans are able to get them; and only 27% of the countryside is covered by the government’s Rural Credit Co-operatives. Less developed areas in China are increasingly lacking suitable channels for obtaining finance. Even in those areas with suitable channels, the service quality and efficiency is low. What is hindering rural development is a lack of funding sources and skills. Without any collateral or guarantors the rural population cannot get loans and cannot take advantage of opportunities to further their development.

Our Approach

Since 2003, Plan China has adopted and customized international best practice in this field. Plan has set up and trained local micro-credit associations to lend money using various techniques (e.g. not requiring traditional kinds of collateral). Our repayment rates are very high, as is the benefit to the clients after investing their loan.

Program Goals

• Build the capacity of local micro-credit associations to aid their development towards better meeting the needs of the community.
• Increase the capacity of local micro-finance
• Increase in the number of clients who can benefit from Micro-credit programs

Program Activities

• Set up micro-finance associations in each area we work to meet the needs of the community.
• Provide training and opportunities to share experiences to local staff by Micro-credit experts.
• Increase the capital available to the micro-credit associations.  Lack of capital can hinder the effectiveness and limit the success of the program development.

Program Partners

We are working with local partners – Women Federation and developing the local women’s development associations.

Future of the Program

We continue to improve the associations’ capacity and promote their development for micro-credit program. We also plan to a build micro-credit organization at the provincial level in 2009 to provide sustainable support for local associations.

Impact

The program will focus on building the quality of the management and the management systems. Local micro-credit associations will have the technical capabilities to provide the business development to support their clients’ need.