ADB, CFPA Sign $50 Million to Boost Support for Microfinance in PRC
BEIJING, PEOPLE’S REPUBLIC OF CHINA — The Asian Development Bank (ADB) has signed a $50 million loan facility with CFPA Microfinance Management to support approximately 130,000 microentrepreneurs in rural areas of the People’s Republic of China (PRC), which will boost income levels and employment.
The ADB loan will be used for onlending to sub-borrowers in counties designated by central and local governments as poverty-stricken areas. The long-tenor ADB loan will revolve and is expected to fund subloans amounting to over $200 million. The loan is ADB’s first non-sovereign loan in microfinance in the PRC.
“Our assistance to CFPA Microfinance Management will expand access to finance for microentrepreneurs, most of whom are women, and improve delivery of financial services to underserved regions, boosting economic activities that are critical to PRC’s sustainable and inclusive growth,” said Christine Engstrom, Director of ADB’s Private Sector Financial Institutions Division. “We are proud to work with CFPAMM in promoting gender equity by improving rural women’s access to finance through collateral free microloans”.
Around 45% of PRC’s rural population is underserved with credit, with women especially trailing in access to bank accounts and possession of collateral, which are vital to obtain traditional lines of credit. Under the terms of the agreement signed, CFPAMM will use the funds to support household agribusinesses such as crop and livestock farming, individual microbusinesses in trade, manufacturing, and services as well as other rural economic activities.
Although the PRC has a large number of banks and nonbank financial institutions, financial inclusion remains a challenge especially in poorer parts of the country and an estimated 25% of the rural population does not have access to any banking services.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.