Beijing, July 11, 2013
—IFC, a member of the World Bank Group, and the Research Institute of Finance and Banking of China’s central bank have signed a cooperation agreement to jointly research optimal regulatory conditions that help making financing more readily available in China's underdeveloped rural areas and among small businesses.
Building an inclusive financial infrastructure has been a priority for China to expand financial services to its lower income population. To further develop the sector, the People’s Bank of China has launched a number of policies designed to make such lending more efficient and diversified. For instance, the PBOC has encouraged rural and micro finance institutions to standardize their operations. The PBOC has lowered the deposit provision and provided more refinancing support to improve capital liquidity. The PBOC also helped rural and smaller businesses to piloting funding via the bond markets.
“There is still gap between the vast financing needs and actual rural and micro lending that is currently available,” said Pan Gongsheng, Deputy Governor of People’s Bank of China. ”Leveraging resources from international institutions, we will work with all stakeholders in China to further boost rural and micro finance.”
Under the agreement, IFC and the Research Institute of Finance and Banking will study international best practices and China’s market situation to identify an appropriate operating environment for rural and microfinance institutions and for innovative payment solution which can promote financial inclusion.
“Financing needs in East Asia are enormous with an estimated credit gap of around $1 trillion for micro, small, and medium enterprises,” said IFC Executive Vice President and CEO Jin-Yong Cai. “IFC is committed to developing effective and inclusive financial systems that help address the unmet demand for credit, reduce poverty, and promote sustainable economic growth.”
IFC has been utilizing its investment and advisory services to promote rural, micro and mobile financing globally. As one of the world’s largest microfinance investors, IFC supported around 290 projects in 75 countries by 2012, helping to extend $6.2 billion of financing to more than 7 million micro and small businesses.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit