Highlight on China, Part 2 - Interview with China Association of Microfinance

As part of the Microfinance Gateway Highlight on China, Part 2: Financial Service Providers, four interviews were conducted with financial service providers to gain their insight on the current microfinance landscape in China. This interview provides the perspective of Mr. Du Xiaoshan, Director of the China Association of Microfinance (CAM), on the current microfinance landscape in China.Mr. Du Xiaoshan states that:

• Four highlights in the development Chinese microfinance are:
  • Poverty-Alleviation Interest-Subsidized Loans;
  • The Peoples Bank of Chinas (PBOC) pilot project which established seven microcredit companies authorized to provide loans to low- and middle-income rural populations;
  • The China Banking Regulatory Commissions (CBRC) new regulations that support efforts to expand financial services to rural areas;
  • The encouragement provided to commercial banks by PBOC and CBRC to provide loans to small and microenterprises.
• These initiatives are need-based;
• They are still in the pilot stage and contain legal barriers;
• President Hu Jintaos principle of Scientific Development focuses on people and uses microfinance as a tool to bring about rural, regional, and economic and social development.

The interview concludes by describing CAMs role in shaping microfinance in China, stating that:

• CAM aims to:
  • Help people share experiences;
  • Offer technical assistance in capacity-building to microfinance institutions (MFIs);
  • Represent MFIs in making suggestions to the government;
  • Assist MFIs in collecting funds.
• CAM faces the challenges of:
  • Getting independent legal entity status;
  • Obtaining sustainable funding;
  • Training staff with limited experience in microfinance;
  • Choosing which MFIs to target.