Date: May 15th, 2010, Source: 21st Century Business Herald
(http://finance.jrj.com.cn/biz/2010/05/1515037469908.shtml)
With an innovative mode comprising “Anti-poverty Donations plus Microfinance plus Productive Aid”, IB's Chengdu Branch has set out to “Vitalize Agriculture” and help local farmers out of poverty.
From passive to active
In Jinxin Township, Dayi County, Sichuan Province, IB's Chengdu Branch has been helping the local rural population out of poverty by employing an innovative mode that combines anti-poverty donations with microfinance and productive aid. A few years ago, IB's Chengdu Branch learned by chance of the high school drop-out rates among children in the mountainous Dayi area of Chengdu. Many students could no longer go to school because of the distance they had to travel or because of the disrepair of school buildings. Driven by a strong sense of social responsibility, staff from IB's Chengdu Branch actively donated more than RMB 200,000 Yuan to found an “IB Hope Primary School” in Jinxin Township , Dayi County. The school is able to cater to students living within a 10-kilometer radius. During the devastating Sichuan Earthquake, the school not only escaped unscathed, but also served as a shelter for the locals thanks to its excellent quality.
Starting with donations to aid education, IB's Chengdu Branch gradually expanded the scope of its aid to cover the living quality and poverty of students' families and the poor rural residents of Jinxin Township , Dayi County. It launched the “Six One Project” which involved the building of a Primary School, a Road, an agricultural base, a health center, a nursing home for the aged and a library. There is a saying that goes: “It is better to give someone the ability to fish than to give them a fish”. IB's Chengdu Branch realized that aid alone was not enough, and set about developing an innovative new mode - “Anti-poverty Donations plus Microfinance plus Productive Aid” and thereby help the local population to develop modern eco-agriculture according to local conditions. As a trial, IB's Chengdu Branch signed an agreement with Jinxin Township to select the 30 poorest families in Peace Village and establish an “Ecological Gardening Base” by centralizing their land and then granting microfinance in addition to a donation of RMB 50,000 Yuan donated by the Chengdu Branch to be used as start-up capital. Thus, the farmers became “farmer workers”, and the mode by which the land was used changed from family-based extensive agricultural operation into intensive operation with a certain scale. At the same time, the Chengdu Branch employed agricultural technicians to teach the farmers gardening techniques, arranged for the farmers to visit modern areas and recommended sales channels so that they were able to participate in production, supply and sale as a part of the modern agricultural industry chain. The purpose was to help them out of poverty quickly and effectively, and with limited investment. This mode differs from simple donations or standard poverty relief loans in that it provides a sustainable source of wealth and maximizes the role of financial tools as instruments that support the balance between urban and rural development.
“Industry nurturing agriculture”
Agricultural industrialization is the key to the “Way of Vitalizing Agriculture”. Adopting an approach in which “Industry nurtures agriculture”, IB's Chengdu Branch has continued to increase credit to leading enterprises in agriculture industrialization.
The Chengdu Ande Vegetable & Food Company was founded in March 2008. The company specializes in agricultural products such as soybean sprouts, mung-bean sprouts, south tofu, north tofu, lactone tofu, tofu skin and dried tofu. In 2009, the company wished to expand the scale of its production but lacked the funds to do so, and was in need of bank assistance. After conducting an on-site investigation and survey, IB's Chengdu Branch quickly issued an initial credit extension loan of RMB 5 million Yuan. With the development of the scale of the Ande Vegetable & Food Company and the increasing demand for funds, IB's Chengdu Branch increased the credit extension to RMB 35 million Yuan step by step, thus solving the problem of fund shortages. Today, the Ande Vegetable & Food Company has become the largest bean sprout production base in the world.
IB's Chengdu Branch has issued a total of RMB 200 million Yuan in loans to modern agricultural enterprises in Dujiangyan, Xinjin and Longquan, and has also offered more than RMB 200 million Yuan in credit extension loans to upstream and downstream enterprises in agriculture such as Fuhua Tongda Pesticides Science & Technology Co., Ltd, Leshan, and Sichuan Huatong Lemon Co., Ltd. It has provided genuine financial support to leading local enterprises in agriculture industrialization. In addition, to address the problem of credit guarantee for agricultural enterprises, IB's Chengdu Branch has established a partnership with the Chengdu Modern Agricultural Enterprise Guarantee Co., Ltd to offer a guarantee platform to support its granting of credit for agriculture-related enterprises.
The “first bucket of gold” from comprehensive treatment of land
As one of the national pilot areas for coordinating urban and rural integrated support reform, in recent years, the Chengdu Municipality has listed the comprehensive treatment of land in the rural areas of the municipality as one of the key points in its rural initiatives. On November 8, 2009, the launching ceremony for land comprehensive treatment in the rural areas of Chengdu was held at the Sanxi Township, Jintang County. The target to accomplish the comprehensive treatment of 200,000 hectares of arable land and about 20,000 hectares of rural residential land within six years was announced at the event, the aim being to promote agricultural development and to increase rural incomes.
IB's Chengdu Branch has identified a new field in “Financial services for Three Agricultures”, which has been brought about by the comprehensive treatment of land in rural areas. Based on repeated on-site investigation and collection of data in Jintang County, a standard county for comprehensive treatment in Chengdu, IB's Chengdu Branch is convinced that comprehensive treatment of land and centralized relocation of rural housing can not only improve living conditions and meet the demand for urban land whilst protecting arable land, but can also allow for treated land to be sold by the government and thereby help to increase incomes and solve actual difficulties. Therefore, IB's Chengdu Branch has launched innovative project loans for comprehensive treatment of land in rural areas. It issues project loans with terms of three to five years to land reservation centers or other qualified agents in all quarters, which are used for comprehensive treatment in respect to rural farmland renovation, wasteland reclamation, reclamation of waste industrial and mining land, construction of farmland water conservancy works, disassembly and integration of the rural residential land and construction of rural infrastructure, where the repayment derives from the transaction payments of newly increased arable land index after treatment and the index of the vacated collective construction land or from the minimum-guarantee acquisition payment by the Chengdu municipality. In February 2010, IB's Chengdu Branch smoothly issued the first loan amounting to 300 million Yuan to support the rural land treatment projects by the Land Treatment Center of Jintang County.
Through comprehensive land treatment, abandoned and idle land is revitalized and arable land resources will become more abundant. Local farmer Zhang Huaichun says:“before the treatment, the rental for a 667 square meter plot of land was just four or five hundred Yuan, now I am sure that I can get at least one thousand Yuan at least”. Zhang has three 667 square meter plots of land, originally used for growing rice and bringing in an annual income of three or four thousand Yuan; after land treatment, he leases his land out, bringing in an annual income of three thousand Yuan, while he himself is employed to conduct managerial work, for which he receives a monthly income of 1,800 Yuan.
Added to this, IB's Chengdu Branch has fully exerted its advantages as a regional bank and actively supported the post-disaster reconstruction work in earthquake-stricken areas of Sichuan . It has provided RMB 1.4 billion million Yuan in credit to support the construction of the Beichuan new county seat, issued RMB 1.234 billion Yuan of loans to Dujiangyan City, used for the post-disaster infrastructural constructions for 250 residential settlements in rural areas and the post-disaster construction for the “Lingyishan Tunnel” project. As of the end of 2009, IB's Chengdu Branch had issued RMB 6.94 billion Yuan in loans for post-disaster reconstruction to key areas of concentrated residential settlement in Mianyang, Dejiang and Dujiangyan, making significant contributions to the post-disaster reconstruction effort.