Citigroup's microloans improve life for farmers ( 2003-09-23 01:29) (China Daily)
International financial colossus Citigroup is cutting global multi-million
dollar deals to help change China -- one poor farmer at a time.
Its remarkable method: providing grant money to lift people's lives through
microfinance loans.
Last year, the firm gave US$1.3 million y to the Grameen Trust, the
organization that has introduced microfinancing as a funding model to China and
manages donated funds to finance loans for the poor.
Now about US$505,000 of the Citigroup donation has been provided as seed
capital and start-up funds for four poverty-relief co-operatives in Hebei,
Jiangxi and Sichuan provinces and to the Inner Mongolia Automonous Region. Each
of the group can then directly lend the funds to local farmers, Citigroup
officials said.
The projects are expected to provide microfinance loans to more than 3,000
farmers in the various regions during the next two years.
Microfinancing refers to small-volume financing to small-scale start-up
projects. Such financing has been applied to poverty-relief projects in China
and has assisted many people, especially women, in poorer areas to start
individual businesses and improve their living standards, said Du Xiaoshan,
deputy director of the Agricultural Development Research Institute of Chinese
Academy of Social Sciences.
Though the volume of each microfinance loan is very small, which normally
ranges between US$120-US$400, it does have "a real impact in changing people's
lives,'' said Richard Stanley, a Citigroup spokesman, at a press briefing
yesterday in Beijing.
Yao Guiqin, a farmer in Chifeng, Inner Mongolia, for example, lives an
entirely different life on the microloans she received.
Yao said she first started trading farm products on the 1,000 yuan (US$120)
she borrowed from her local microfinance project management agency in 2000. She
was able to triple her income, and gradually expanded her business and borrowed
even more.
A survey into the livelihood of the microloan users has found that most of
them improved their living conditions and enhanced their lives, while greatly
increasing their confidence.
