Private sponsors boost banks, suppport local economies

China's rural village banks are flourishing thanks mainly to private sponsors. The growth of these banks is helping to boost local economies, which mainly consist of many small and micro businesses.

For many small business owners in rural China, getting loans from banks is much easier now thanks to village banks.

Li Zhifeng runs a farming cooperative. He borrowed eight hundred thousand yuan from a local village bank to build four of this facilities to store sweet potatoes.

Li gets his loan from the Yuanshi Rongxin village bank.

It mainly provides small loans to small and micro businesses. The number could range from tens of thousands to four million yuan. Unlike large banks, it allows applicants to purchase agricultural machinery, apart from homes and land. Most customers are farmers and small business owners.

So far, this bank has granted loans of thirty billion Yuan and has been running for two years without a single bad loan.

Private sponsors hold nearly eighty percent of the bank's shares. The Hebei Wangsifang seed industry is one of the private sponsors.

Zhao's company now holds nearly three percent of shares in the Yuanshi Rongxin Village Bank. Apart from receiving a bonus from the bank for introduing his customers, he sees his seed business growing at a faster pace than ever before.

Hebei province now counts over 27 county banks,and their total assets have reached ten billion yuan through 2013.

In Hebei province, small businesses are the main economic driving force in many of its counties. According to the latest statistics, they represented half of the government's total fiscal revenues. And now, many farmers and small business owners are set to benefit from the development of county banks, which will provide new economic channels.