Provisional Rules Governing Rural Household Microfinance with Rural Credit Cooperatives

China

(enacted in 1999)

Rural Credit Cooperatives are the most common and widespread microfinance providers in rural areas. For the purpose to increase income and improve life of farmers, microcredit started to be an effective way since 1990s. Microcredit to rural households is aiming to help agricultural production and construction of small production infrastructure.

Farmers are required to get assessed in the unit of family from an assessment group before getting a loan. The assessment based on credit, income and records of previous loans. Once credit is approved, farmers can get loans as they need with the limit to their approved total amount.

The principle this microcredit is Yiciheding, Suiyongsuidai, Yu’ekongzhi, Zhouzhuanshiyong (Once approved, loan as needed, balance control , turnover of capital).

There are several chapters of the Rules:

Chapter I General Provisions

Chapter II Borrower Requirement and Functions of Loans

Chapter III Credit Assessment and Limits

Chapter IV Management of Loans

Chapter V Repayment and Interest Rate

Chapter VI Supplementary Provisions