Citigroup announced yesterday a US$1.5 million grant to support microfinance projects in China.
The money, following a first US$1.3 million grant in 2001 to offer microfinance loans to Chinese farmers, will be used to provide better training and technical services to management and staff of microfinance institutions throughout the country.
It is expected that about 1,000-1,500 people will receive such training over the next five years at the Microfinance Training Centre. Backed by Citigroup, the centre is managed by the Rural Development Institute of the Chinese Academy of Social Sciences.
Microfinance, a supplement to bank loans and fiscal subsidies, often involves small-volume lending to farmers or laid-off workers to help them start up their own businesses and alleviate poverty. Normally, such loans are granted via specialized agencies like poverty-relief co-operatives.
Microfinance has been a reality in China for a decade, but the sector is still hounded by a shortage of qualified professionals and funding resources, experts say.
Systematic staff training and regular exchanges with overseas experts will help improve the situation, said Du Xiaoshan, deputy director of the Rural Development Institute.
Catherine Weir, Citigroup's country officer for China, says its participation in microfinance projects will help create more sustainable growth for Chinese communities and allow stronger local economies to develop.
The construction of better infrastructure within the sector will lay a solid foundation for the future growth of microfinance.
Citigroup has awarded US$19 million in grants to 178 microfinance partners in more than 50 countries, corporate statistics show.
In China, most of the micro-finance agencies are non-government organizations. It is expected that an industrial association will be established for the agencies to enhance their self-discipline and interaction, according to Bai Chengyu, head of the Support and Co-ordination Office for the Poverty Alleviation Programme, which is run by the United Nations Development Programme and the Ministry of Commerce.
(China Daily November 17, 2004)