The Birth, Development and Contribution of Grass-roots Banks

This paper introduces the three stages of the development of "grass-roots bank" in China and the reasons for its success, and points out its contribution to the rural financial reform in China.

Keywords: grass-roots banks; Rural financial reform

I. Introduction

Since the late 1970s, our government has carried out several rounds of reform and innovation around the issue of rural financial institutions serving agriculture, countryside and farmers better, and achieved certain results. However, there are still many problems in the field of rural finance, which has become the bottleneck industry of rural economic development.

"Grass-roots banks" refer to rural banks, loan companies, rural mutual funds cooperatives and other financial services institutions that conduct business in cities or rural areas with the approval of the CBRC. These institutions are often positioned as poor banks, that is, financial institutions that provide microfinance services to small customers. The emergence of "grass-roots banks" not only provides ideas for financial reform in China, but also contributes to rural financial reform.

Second, the emergence and development of "grassroots banks" in China

(A) China "grass-roots banks" sprout (1988 ~ 1995)

China's "grass-roots bank" sprouted in June 1988. Taizhou City Commercial Bank, formerly known as Ginza Financial Services, was established by the current chairman Chen Xiaojun and 10 self-employed individuals with a registered capital of100000 yuan. At the beginning of its establishment, the service agency was located in a bungalow facing the street in luqiao district, Taizhou, with only six staff members. In June, 1993, Tailong Urban Credit Cooperative was established. At that time, there were only seven employees with a registered capital of 1 10,000 yuan. These two rural financial service institutions are similar in nature to the "big money houses" in China's history, but they can't be regarded as "grassroots banks" in the true sense.

(B) the development of "grassroots banks" in China (1995 ~ 2006)

Since 1995, "grassroots banks" have made great progress in China, which is marked by the transformation of financial services institutions in Ginza from "big money banks" to real banks. 200 1 After the reorganization, Ginza Financial Services Company was positioned as a cooperative bank for small and micro enterprises and renamed as Luqiao Ginza Urban Credit Cooperative. In March 2002, Taizhou City Commercial Bank was established with a registered capital of 300 million yuan and a government equity of only 5%. By the end of 2003, the deposit balance of Taizhou Commercial Bank reached 8.385 billion yuan, accounting for 45% of the deposit balance of all financial institutions in the region. The loan balance is 5.697 billion yuan, accounting for 46% of the loan balance of all financial institutions in the region, and the balance of deposits and loans ranks first among financial institutions in the region. The profit reached1.200 million yuan, and the return on total assets reached 1.6%, which is also one of the few in the world. From June, 5438 to February, 2003, the Financial Times published the top 50 commercial banks in China, including four wholly state-owned commercial banks, namely, industrial, agricultural, China and China Construction, 1 1 national joint-stock commercial banks and1city commercial banks.

Today, after 12 years, the creator of another miracle, Tailong Urban Credit Cooperative, has a balance of 4.4 billion yuan in various deposits and 2.86 billion yuan in various loans, of which 95% of the deposits come from micro-enterprises, and 9 1% of the loans are also for micro-enterprises, and the non-performing loan ratio has dropped to 0.88%.

At present, the deposits and loans of these two grass-roots banks account for more than 60% of the total scale of roads and bridges. Many well-known economists, experts and scholars visited Tailong on the spot, and thought that Tailong broke a new path for the reform of small and medium-sized financial institutions in China and was a successful model of joint-stock cooperative financial enterprises, which strongly proved that local joint-stock commercial banks and small and medium-sized private enterprises were natural complementary partners.

In addition to these two banks, with the relaxation of national policies, new "grass-roots banks" have been established one after another, contributing to farmers' financing and rural financial reform. For example, on June 5, 2006, 5438+ 10, and July 6, 2006, Shuoji Fumin Cooperative, the first "grassroots bank" in Puyang City, was established in Puyang City, Henan Province, with the approval of the civil affairs department.

(C) The new development of "grassroots banks" in China (from 2006 to present)

Since the CBRC issued "Several Opinions on Adjusting and Relaxing the Access Policy of Banking Financial Institutions in Rural Areas" in June 5438+February 2006, grassroots banks have flourished in China. China Banking Regulatory Commission (CBRC) relaxed the access policy for rural financial institutions. Both industrial capital and private capital can invest in rural areas, acquire and set up various banking financial institutions, and liberalize the access of rural financial institutions on a pilot basis. And choose the central and western regions to take the lead in implementation. This reform will be carried out in accordance with the principle of "pilot first, then push it away; Midwest first, then inland; Efforts should be made to solve the problem of service gap before solving the problem of insufficient competition. The first batch of pilot projects were carried out in rural areas of Sichuan, Qinghai, Gansu, Inner Mongolia, Jilin and Hubei provinces (regions). On March 1 2007, the first batch of new financial institutions in China came into being, such as Yilong Huimin Village Bank, Huimin Loan Company, Jilin Dongfeng Chengxin Village Bank and Jilin Panshi Rongfeng Village Bank in Jincheng Town, Yilong County, Sichuan Province, and became the pioneers of the new round of rural financial reform in China. Many village banks have appeared in Jilin, Gansu and other provinces. For example, Baixin Rural Mutual Fund Cooperative in Yan Village, Lishu County and Credit Suisse Rural Bank in Xifeng, Qingyang, Gansu Province. Huang Guangwei, the chairman of Yilong Huimin Rural Bank, and people in the industry explored the new operation mode of "grass-roots bank" of "three combinations, three linkages and trinity" in the reform, which gradually showed strong vitality in practice. With the emergence of "grassroots banks", many agricultural banks and credit cooperatives are actively carrying out their own new reform experiments, which is undoubtedly a good start for rural financial reform.

Third, the reasons for the success of "grassroots banks" in China

(A) the liberal attitude of local governments

Behind the rise of the two "grass-roots banks" in Luqiao are powerful private economy, private enterprises and enlightened government. In March, 2002, Taizhou City and the financial supervision department assessed the situation, provided policy support for the development of grassroots finance, and prompted Ginza and other 18 private enterprises to initiate the establishment of joint-stock Taizhou Commercial Bank, with the municipal finance accounting for only 5% of the shares. The purpose was actually to resolve the policy forbidden zone for grassroots banks.

(B) the correct positioning of "grassroots banks"

Small and medium-sized enterprises generally have problems such as small scale, large number of households and imperfect financial system, so it is difficult for enterprises to meet the requirements set by big banks, which leads to a vacuum in the credit market of small and medium-sized enterprises and provides soil for the emergence and development of grassroots finance in Luqiao. The orientation of non-governmental financial services in Fang Xiangming is to serve private economy, private economy and residents.

(C) The internal corporate governance of the bank is relatively perfect

Taizhou Commercial Bank and Tailong Credit Cooperative are completely private banks with clear property rights, accurate financial positioning, perfect governance structure, incentive mechanism and internal control system, and established the governance structure of modern financial enterprises.

(D) the quality of managers and operators is high.

Managers and operators of "grassroots banks" have a strong sense of responsibility in addition to solid professional knowledge. Because credit is mainly for small customers, there is often no guarantee, so it is extremely important to know the customer's situation. Whether in Taizhou Commercial Bank, Puyang Microfinance Cooperative or other "grass-roots banks", there are a large number of credit personnel who are solid in their work and know their customers like the back of their hands. If there is a crisis (such as the risk of bank run in Ginza in September, 20065438+0), employees can focus on restoring the reputation of the bank.

(E) the real implementation of the service concept

"Grass-roots banks" can put the concept of serving farmers into practice. Their loan officers not only know the basic situation of each farmer in their own area, but also know their loan needs, and customize loan schemes and even technical services for them. The staff of another "grassroots bank", Sichuan Yilong Huimin Loan Company, which opened on the same day as Huimin Village Bank, made an investigation on farmers' loans in Qianjin Village and made investment planning and follow-up services for farmers, which is rarely done by traditional rural financial institutions.

(six) the high efficiency of credit management

The efficient credit management of "grass-roots banks" is not only reflected in the types of credit, but also in the approval of loans. The loan projects of "grass-roots banks" are various, which are beyond the imagination of many big banks, ranging from special agricultural loans, such as the development of aquaculture, to applications for the purchase of fertilizers, seeds and even the return of bride price (Puyang Credit Union).

In Yi Long Huimin Loan Company, Sichuan Province, after understanding the investment plan and income return of farmers, if they meet the requirements, farmers can get loans within two or three days, which fully reflects the high efficiency of the loan company. In Taizhou Commercial Bank, most loan applications are approved on the same day, and it only takes half an hour at the earliest. This is generally impossible in big banks. Credit Suisse Bank conducted an in-depth field investigation on the day when the customer Liu Bailin applied for a loan. They think that the company's business risk is small, its products are marketable, its economic benefits are considerable, it can drive the surrounding farmers to get rich, and its development prospects are promising, so they have implemented relevant procedures such as guarantee mortgage. It took only two days from applying for a loan to getting a loan of 6.5438+0.5 million yuan. Another farmer Bai successfully obtained a much-needed loan of 50,000 yuan the day after his application. It can be seen that the loan efficiency of many "grassroots banks" is unmatched by other city commercial banks.

Fourthly, the contribution of "grassroots banks" to rural financial reform in China.

"Grass-roots banks" provide small loans to the poor, so that the poor can find ways to eliminate and avoid poverty, which is an important way to promote the economic and social development of the bottom of society and build a harmonious society. Supporting entrepreneurship to get rid of poverty rather than relying solely on government relief is a successful new way, giving full play to the role of financial leverage and financial system innovation in poverty alleviation. At the same time, grass-roots banks have also made outstanding contributions to China's rural financial reform.

(A) created a new mode of operation of rural financial services

Successful "grass-roots banks" often adopt the operation mode of linkage with relevant departments, that is, the brand-new operation chain of "enterprises+bases+farmers+government+village banks+insurance companies+other financial institutions", so as to make them develop healthily, stably and continuously.

(B) In order to reduce the credit risk, a new path has been created.

"Grass-roots banks" are close to customers and help each other, which ensures that banks have sufficient sources of funds and loan recovery, reduces loan risks and creates new ways to prevent, resolve and disperse credit risks.

(C) filled the vacancy of rural financial services

The emergence of "grassroots banks" is a catalyst for rural financial reform. Grass-roots banks have done business that big bankers disdain to do, controlled risks that big banks can't control, created achievements that big bankers can't create, and filled the blank area of financial services.

(4) Restrain the development of underground finance.

For various reasons, underground financial activities have always been an obstacle to the normal development of China's financial industry. In recent years, there are signs that the government has cracked down on underground banks more and more severely, but underground banks have become more and more prosperous. The emergence of "grass-roots banks" has largely inhibited the development of underground finance and promoted the reform of China's financial industry.

(E) It provides a new way of thinking for the marketing of the financial industry.

The financial industry has always cared about the poor and loved the rich, but almost all financial enterprises are worried about non-performing loans. The extremely low non-performing loan ratio of "grass-roots banks" (for example, the non-performing loan ratio of Taizhou Commercial Bank was only 0.88% in 2005) completely subverts the statement that banks do not deal with the poor (that is, they cannot lend to farmers and enterprises without assets) because the poor have a bad reputation. Facts have proved that personalized transactions are often more effective than strict credit approval procedures and conditions. Therefore, it also provides a new idea for banks to further reform and optimize the marketing system.

Verb (abbreviation of verb) conclusion

Although China's "grass-roots bank" has developed for nearly 20 years from its germination to now, and it has been 12 years since it officially became a bank, its development and contribution to rural economy are also indisputable facts, but as an attempt of rural financial reform in China, there are still many problems.

Therefore, the healthy development of China's "grass-roots banks" needs the support of relevant national policies and the strong support of local governments, as well as its own continuous improvement, so as to grow stronger and make greater contributions to China's rural economic development, rural financial reform and farmers' poverty alleviation.