Inclusive finance is an important force for rural revitalization. Since the beginning of this year, financial institutions have made active efforts in inclusive finance, drawing fresh water from finance to irrigate all kinds of agriculture-related entities, especially to solve the problem that financing is difficult and expensive for small and micro-agricultural entities. How to get through inclusive finance’s blocking points in agriculture-related fields? How to improve the service coverage of inclusive finance? Next, we need to continue to deepen the writing of inclusive finance.
Building a Multi-service System
Inclusive finance has made great progress since it was put forward. The inclusive finance concept has not only been deeply rooted in people’s hearts, but also established a multi-level supply and service system. From the perspective of agriculture-related financial services, various financial institutions actively promote rural revitalization, focus on the field of financial services, actively rationalize the mechanism, expand the scope and improve the quality, and accurately irrigate the living water of finance into the fields.
Recently, the State Council issued the "Implementation Opinions on Promoting High-quality Development in inclusive finance", which pointed out the direction for the implementation of inclusive finance. The "Implementation Opinions" proposes to guide all types of banking institutions to adhere to positioning and healthy competition. Promote all kinds of banking institutions to establish and improve a long-term mechanism that dares to lend, is willing to lend, can lend and will lend. Experts said that banking institutions should not rush into the field of "agriculture, rural areas and farmers". Different banks should develop characteristic financial products based on the characteristics of their own customer groups and serve the field of "agriculture, rural areas and farmers" step by step.
From a macro point of view, financial institutions are accelerating the construction of inclusive finance, and the path and road map of inclusive finance’s service to agriculture, countryside and farmers have become clearer. For example, large and medium-sized banks set up inclusive finance business department to extend the service scope of inclusive finance by establishing franchise mechanisms such as separate credit plans; Local corporate banks combine their own positioning, strengthen inclusive finance’s strategic orientation, and use their popularity and geographical advantages to serve small and micro, "three rural" customers; Policy banks will cooperate in lending business in key areas in inclusive finance.
Ye Yindan, a researcher at China Bank Research Institute, said that it is of great significance to emphasize the construction of multi-level financial services when serving rural revitalization. Constructing multi-level financial services can meet the financing needs of small and micro enterprises and farmers in rural areas. Traditional financial institutions have high approval standards for loans to small and micro enterprises and farmers, and it is difficult to meet their financing needs. The construction of multi-level financial services can introduce more non-bank financial institutions and social capital to participate in rural financial services, provide more flexible and convenient loan channels, help small and micro enterprises and farmers solve capital problems and promote their development and growth.
With the deepening of inclusive finance, the coverage of financial services has gradually expanded, especially the basic financial services in counties and rural areas have developed rapidly. At present, 97.9% of the country’s banking institutions cover villages and towns, basically realizing that villages and towns have institutions, every village has services and every family has an account. At the end of the third quarter of 2023, the balance of agricultural loans in local and foreign currencies was 55.8 trillion yuan, up 15.1% year-on-year, and the growth rate was 1.1 percentage points higher than that at the end of last year. In the first three quarters, it increased by 6.63 trillion yuan, an increase of 1.17 trillion yuan.
The continuous growth of agriculture-related loans is the concrete embodiment of "agriculture, countryside and farmers" of precision drip irrigation in inclusive finance. The relevant person in charge of the State Financial Supervision and Administration said that comprehensively promoting rural revitalization is an important task of building an agricultural power in the new era, and more financial resources should be allocated to the fields of agriculture, rural areas and farmers to better meet their diversified and multi-level financial needs.
Guarantee investment in key areas
Since the beginning of this year, banking institutions have focused on farmland construction, rural characteristic industries and other key areas, strengthened services in inclusive finance, increased sustained investment in agriculture, and achieved remarkable results in rural revitalization.
Inclusive finance should strengthen the foundation of farmland construction for rural revitalization. This year, the Guiding Opinions on Financial Support for Promoting Rural Revitalization in an All-round Way and Accelerating the Construction of an Agricultural Power issued by the People’s Bank of China and the State Financial Supervision Administration clearly stated that in accordance with the requirement of gradually building all permanent basic farmland into high-standard farmland, we should focus on key areas such as soil improvement and farmland irrigation and drainage facilities, give differentiated policy inclinations in the subject of loans, repayment methods and loan term, and explore and promote comprehensive improvement in the whole region to help build, transform and upgrade high-standard farmland.
"inclusive finance can play an important role in promoting the construction of high-standard farmland." Ye Yindan said that the construction of high-standard farmland needs a lot of capital investment, including investment in land consolidation, water conservancy facilities and agricultural machinery. However, due to the lack of funds for farmers and grass-roots village collectives, it is difficult to bear high investment costs. At this time, institutions in inclusive finance can provide financial support for its high-standard farmland construction by providing loans and credit guarantees, so as to alleviate the pressure of capital investment.
In addition, it is also the focus of inclusive finance’s efforts to help rural characteristic industries with credit, and financial institutions should increase the financing of characteristic industries. "With this working capital, the Hakka smoked chicken factory in the village will be able to produce at full capacity." Li Zhenqiu, head of Tianbei Village Stock Economic Cooperative in Dajishan Town, quannan county City, Jiangxi Province, said that at the end of each year, the local Hakka smoked chicken sales increased substantially. In the past, due to the lack of working capital, the village collective cooperatives had problems such as falling behind in production capacity and losing customers. In order to broaden the financing channels of characteristic industries, quannan county United Rural Commercial Bank launched the appointment of "financial village officials" to inject financial living water into agriculture-related industries such as agricultural enterprises, cooperatives and large-scale farmers. From January to October this year, the "financial village official" model issued a total of 2.683 billion yuan of agricultural loans, benefiting 9664 farmers.
"Characteristic industry is an important sector to realize rural revitalization, and it is the key to increase farmers’ income and stabilize agricultural development. There are weak links in its development that need effective support from inclusive finance services." Wu Dan, a researcher at China Banking Research Institute, said that the bank’s inclusive business should meet the needs of differentiated products and services in key rural areas and enhance the sense of financial acquisition of rural inclusive groups. Inclusive finance’s support for rural industries should be orderly and focused, and the characteristic industries in key rural areas should be accurately drip-irrigated, so as to solidly promote China’s rural revitalization and achieve comprehensive achievements.
Inclusive finance enables the development of key rural areas, which can touch the capital demand of agricultural business entities with large quantity, wide range and small amount. Experts said that with the support of financial institutions’ inclusive business, the development of rural key areas can obtain periodic and regional resource scheduling, and the problem of information asymmetry of agricultural entities will be gradually solved, which will promote the more rational allocation of financial resources to the "three rural" areas and promote the sustainable development of rural small and micro-business entities.
Innovating and optimizing financial products
Innovating and optimizing financial products and reducing financing costs are the important goals of inclusive finance’s development. For a long time, whether it is individual farmers or village collective organizations, the high financing cost is a common problem, which restricts the development of rural industries. Judging from the current rural financial products at the grass-roots level, inclusive finance, an individual banking institution, has the characteristics of single loan product structure, high interest rate and slow lending, and the phenomenon of high customer access threshold and low loan availability is more common.
For example, in order to reduce financial risks, many banking institutions generally have additional mortgage guarantee requirements for financial products. This form of mortgage guarantee has undoubtedly raised the threshold for capital access for the majority of small farmers with light assets. In addition, due to the current situation of cumbersome credit procedures and insufficient humanized services in grass-roots financial institutions, and the fact that grass-roots financial institutions will consider financial risk prevention, they often use restrictive means to curb the actual demand for agricultural credit.
Experts said that financial institutions should enrich financial products and services that support the development of farmers and optimize credit loan services for farmers. Credit loans have high requirements for financial institutions’ financial technology level and asset strength. It is not only time-consuming and laborious to tailor credit files for users by traditional methods, but also requires huge financial support. In order to comprehensively promote the implementation of rural revitalization strategy and help the development of new rural collective economy, financial institutions need to constantly innovate credit loan products to meet the financial needs of agricultural customers.
The credit business of rural collective economic organizations is an important part of inclusive finance and agriculture-related loans of China Construction Bank. "Collective Credit Loan" is a credit loan product developed by CCB for rural collective economic organizations. Recently, the first "collective credit loan" in China was successfully launched in Shaanxi Ankang Cailiang Community Economic Cooperative, with a credit amount of 5 million yuan. The head of the grass-roots government team of the institutional business department of CCB said that in order to help rural areas revitalize high-quality development, CCB has provided "accurate portraits" for more than 13,000 rural collective economic organizations across the country, provided credit evaluation for financing services, improved the convenience of financing for rural collective economic organizations, and solved the pain points of less products, expensive services and long process in the rural market.
Reduce financing costs and strengthen the resilience of agriculture-related subjects. Experts said that for commercial banks, continuously innovating loan products and reducing financing costs are conducive to rapidly increasing the scale of inclusive loans and expanding new customer groups while consolidating existing customers. In the future, commercial banks need to innovate the digital business model to solve the problem of expensive financing, further strengthen the docking of scenes with agriculture-related subjects, so as to adapt to the needs of different industries and different customer groups, and then promote the expansion of financial services to rural areas.