NW China farmers rake in profits from loan program

LANZHOU - Zhang Zhiqin, a farmer in northwest China's Gansu Province, will spend more time this year taking care of his family fortune: three cow and five lambs, which he bought with the help of local banks.

For many years, the people of Chisha Village in Dingxi City have made their living through farming, but profits have always been thin. Steep mountainous terrain, frequent droughts and a hostile natural environment limited local farmers from doing other business.

Zhang had been keen to raise livestock, but he lacked the money to buy cows and sheep.

"My neighbors were also poor. I did not know where to borrow money," said Zhang.

In 2006, Chinese authorities started a loan program in poverty-hit villages across the country to fund poor villagers to develop new business. Every village was given 100,000 to 150,000 yuan ($14,500 to $21,700) and farmers could borrow up to 10,000 yuan each.

However, the program ultimately could not meet the demands of needy people due to its low lending quota and short lending period.

In 2015, Dingxi City upgraded the loan program and launched a credit loan plan to increase the lending quota, under which villagers can borrow 50,000 yuan from banks after saving 10,000 yuan as a credit guaranty.

"We also prolonged the repayment period to meet the long-term financing needs of farmers," said Xu Binke, deputy head of Tongwei County in Dingxi.

Zhang is one of the beneficiaries. He borrowed 50,000 yuan last year and bought several cows and lambs as well as agricultural production tools to expand his cultivation area.

"I will sell six to seven grown sheep and one cow some months from now. The income is much higher than that from selling crops," said Zhang.

More than 1,800 villages in Dingxi have established special associations to help villagers attain these loans. Each poor village in Dingxi receives 300,000 to 500,000 yuan. By 2016, about 530 million yuan in loans had been lent to 867 such associations, benefitting 12,000 farmers.

"The project increases loan opportunities for farmers in need, alleviating their fund shortage problem," said Zhang Quanyou, deputy secretary general of the Dingxi City Committee of the Communist Party of China.

The project has also allocated a sum of money to buy critical illness insurance for poor villagers to help cover large medical costs. As of March 2017, 166,000 people had been included in the insurance program.

"We are no longer worried about the medical costs and can pay more attention to our farm work," said Zhang.