Rural credit cooperative
A rural credit cooperative (RCC) (
History
In The 1950s, a network of rural credit
In the late 1970s, after
Individual and enterprises often turn to other sources of credit, which range from
Until 1996, the RCCs were supervised by the Agricultural Bank of China. In 1996, they were transferred to the People's Bank of China.[4]
In July 1998, the rural credit
Since 1998, many of the RCCs have gradually been transformed into rural commercial banks (RCBs). The first foreign investment in an RCB was allowed in 2006, when Rabobank and the International Finance Corporation (the private sector arm of the World Bank) acquired stakes in the United Rural Cooperative Bank of Hangzhou.[6]
Challenges
Due to a high volume of
Although the RCCs are gradually being transformed into independent commercial banks (RCBs), they are still not immune from government requests to make policy loans (loans issued for political reasons, such as the desire to support certain politically important industries or firms, rather than because the firm is an attractive candidate for a loan).[7]
See also
- Economy of China
- Chinese financial system
- Banking in China
Notes
- ^ Kellee Tsai, "Imperfect Substitutes: The Local Political Economy of Informal Finance and Microfinance in Rural China and India" World Development 32:9 (September 2004): 1487–1507.
- ^ Kellee Tsai, Back-Alley Banking: Private Entrepreneurs in China(Ithaca, New York: Cornell University Press, 2002), 152.
- ^ Tsai (2002), 2.
- ^ Tsai (2002), 152.
- ^ a b Tsai (2004), 1489.
- ^ IFC News – Press Releases & Features – Press Release
- ^ Tsai (2002), 208.