A senior official yesterday praised the participation of non-government organizations in poverty alleviation, especially for farmers.
"NGOs have been more active, professional and efficient in broadening financing channels for poor farmers," said Gao Hongbin, Deputy Director of the State Council Leading Group Office of Poverty Alleviation and Development in Beijing.
Gao credited the NGOs' micro-finance projects collaborations with financial institutions.
"It is a good beginning," Gao said at the signing ceremony of the 100 million yuan (US$12.7 million) loan contract between the China Development Bank and China Foundation For Poverty Alleviation. "The cooperation is a healthy and sustainable model for the capital thirsty poor farmers."
The newly-raised funds will aid poor farmers in four counties, Fujian, Shanxi and Liaoning provinces who will receive loans amounting to 20 million yuan (US$2.5 million).
This year, the foundation's micro-finance projects have covered 10 counties in seven provinces. More than 150 million yuan (US$18.9 million) was loaned to 330,000 rural poor households and repayment rates have remained high.
The ratio of portfolio at risk over a 30-day period is only 0.1 percent, much lower than the international standard of 3 percent.
For the first time, money for the fund has been secured from banks with interest. Previously, the fund was supported by donations at zero interest.
The foundation, the first NGO in China to carry out poverty alleviation micro-financing operations, has previously contributed 160 million yuan (US$20 million) annually.
Shortage of capital has been a problem for the foundation over the last decade.
"The total loan for each pilot county is no more than 5 million yuan (US$630,000)," said Wang Xingzui, executive director of the foundation. "The amount cannot meet the demand of the poor farmers, not to mention the sustainable development of the micro-finance system.”
With back-up from commercial banks and a more flexible model developed by the NGOs themselves, the micro-finance project may be better able to serve better sustainable development, Gao said.
Nationwide, NGOs specializing in poverty alleviation have grown as more urban well-off dwellers have raised their awareness in volunteer work, Gao said.
But compared with western countries, China's NGOs are still too few. With about 21 million people in rural China living below the poverty line, more efforts from the NGOs are needed, he concluded.
(China Daily December 21, 2006)