A senior official yesterday praised the participation of non-government organizations in poverty alleviation, especially for farmers.

"NGOs have been more active, professional and efficient in broadening financing channels for poor farmers," said Gao Hongbin, deputy director of the State Council Leading Group Office of Poverty Alleviation and Development in Beijing.

The director gave high credit to the NGOs' micro-finance projects in collaboration with financial institutions.

"It is a good beginning," Gao said at the signing ceremony of the 100 million yuan (US$12.7 million) loan contract between the China Development Bank and China Foundation For Poverty Alleviation.

"The co-operation is a healthy and sustainable model for the capital thirsty poor farmers," Gao said

The newly-raised funds will go to poor farmers in four counties, Fujian, Shanxi and Liaoning provinces. They will receive a loan of 20 million yuan (US$2.5 million).

This year, the foundation's micro-finance projects have covered 10 counties in seven provinces. More than 150 million yuan (US$18.9 million) was loaned to 330,000 rural poor households.

Its repayment rate has remained high.

The ratio of portfolio at risk over a 30-day period is only 0.1 per cent, much lower than the international standard of 3 per cent.

Money for the fund, for the first time, has been secured from banks with interest.

Previously, the fund was supported by donations at zero interest.

The foundation, the first NGO in China to carry out micro-financing for poverty alleviation, has previously contributed 160 million yuan (US$20 million) annually.

Shortage of capital has been a problem for the foundation in its 10 years' development.

"The total loan for each pilot county is no more than 5 million yuan (US$630,000)," said Wang Xingzui, executive director of the foundation.

"The amount cannot meet the demand of the poor farmers, not to mention the sustainable development of the micro-finance system," he said.

With back-up from the commercial banks and a more flexible model developed by the NGOs, the micro-finance project may be able to achieve a better sustainable development, Gao said.

Nationwide, NGOs with speciality in poverty alleviation have grown as more urban well-off dwellers have raised their awareness in volunteer work, Gao said.

But compared with western countries, China's NGOs are still too few, he said.

With about 21 million people in rural China living below the poverty line, more efforts from the NGOs are needed, Gao said.

(China Daily 12/21/2006 page2)