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Enabling Regulatory Environment Instrumental for Financial Inclusion in China, Experts Say at International Forum

Beijing, May 21, 2015 —An enabling regulatory environment is instrumental in developing a healthy microfinance sector and deepening financial inclusion in China, according to experts at an international forum hosted by IFC, a member of the World Bank Group, and the Research Institute of the People’s Bank of China in Beijing on May 18.
The “International Microfinance Forum 2015 Legislation and Supervision in China” in Beijing drew 120 participants to share international examples and lessons learned in regulating non-deposit taking lenders, including microcredit companies, in both developed and emerging markets.
Gongsheng Pan, Deputy Governor of the People’s Bank of China, said financial inclusion is critical for China, which has issued a number of policies to develop micro and rural finance leading to positive results over the years. Yet, the sector continues to face problems such as perception issues and the need for increased infrastructure.
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“To unleash the full potential of microfinance, we need to put in place incentive measures and proper infrastructure,” Pan said. “In addition, a shift from ‘strict access, loose regulation, and no-exit mechanism’ to “fair access, adequate regulation, and market-exit mechanism” should be taken.”
The forum is part of the PBOC-IFC Program for Financial Inclusion in China, which aims to expand financial services for rural and micro enterprises in China. The program is expected to help extend services to 10 million new microfinance customers and 60 million new mobile-banking users in frontier and rural areas by the end of 2017.
“Universal access to financial services is key to eradicating poverty and boosting shared prosperity. This allows entrepreneurs to grow their businesses, create jobs, and contribute to economic growth,” said Jin-Yong Cai, IFC Executive Vice President and CEO. “We are working together with partners to widen access to financial services for rural households and microenterprises to improve their livelihoods andhelp them mitigate risks.”
According to the World Bank’s Findex database, there were 238 million Chinese adults who did not have bank accounts as of 2014.
IFC, one of the world’s largest microfinance investors, has invested $3.5 billion in 215 clients across 400 microfinance projects in 73 countries by the end of 2014.
The Program for Financial Inclusion in China is delivered in partnership with Dingyi Venture Capital (HK) Ltd.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org .
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