Mobile loans bring easier financial access to Chinese farmers

HOHHOT - More farmers in China are benefiting from mobile loans, a new and quicker financial service on their phones. It only takes a few minutes before farmers in West China's Inner Mongolia Autonomous Region can get unsecured loans of up to 100,000 yuan ($14,400).

"I have successfully applied for a loan totaling 80,000 yuan on my phone, in only 10 minutes," said Bai Haijun, a farmer in Linhe District near downtown Bayannur in Inner Mongolia.

"The previous bank loan could take at least three to five days after a time-consuming credit assessment, but the new service makes it possible for us to receive the money right after our online application," Bai said.

Since October, the service has become widely popular among farmers in Linhe, China's largest county-level producer of sheep for mutton, and an important processing base of flour and sunflower seeds. Every spring and winter is busy season for farmers in Linhe to pay off their loans and apply for new ones.

"The whole process include several major steps including registration, online credit assessment and signing of a contract. Meanwhile, the information of bank account and ID cards, as well as facial recognition are also needed to complete the apply," said Xi Wenjun, president of the Longsheng Branch with Hetao Rural Commercial Bank.

According to Xi, the commercial bank has further facilitated the application for small loans on phones with a 24-hour online service and a system audit since 80 percent of the bank's loan services are a low amount.

The national credit database and similar platforms allow the bank to provide unsecured loans for farmers as more of their credit information is being incorporated into the credit database, so the bank can give applicants different lines of credit based on credit data.

Over 2,700 households in Bayannur have received loans totaling 210 million yuan ($30 million) within 20 days of the service's launch.

"One application will be valid for three years with a monthly interest rate of 0.83 percent," said Men Guohua, a farmer from Longsheng Village in Linhe. "We can pay off the interests together with the principal balance when the liabilities are due."

In recent years, the financing environment in China's rural areas is improving. More funds for agricultural development flow into the countryside.

The People's Bank of China statistics indicate that in the first half of 2018, farming household loans experienced an increase of 87.4 billion yuan compared to the same period last year.