The quiet Baqiong Village of Bowo County is home to about 130 people. Like most of his fellow villagers, Baima's family lived off planting highland barley (a Tibetan staple food ), with an annual income of no more than 1,700 yuan (200 US dollars).

Eager to shake off poverty, Baima planned to buy a truck and to earn money by providing transport service in 1992, but he finally gave up applying for loans to buy the vehicle because of the high interest rate and complicated application procedures.

"Not only my own house, but also my brothers' would have to be used for the mortgage financing and it would take me more than two weeks to get mortgage certificates + most important of all, the annual 7 percent interest was really out of my reach," said Baima.

Baima's experience is not a unique one. In the early 1990s, getting start-up money was a huge mountain for many Tibetan farmers on their way to run a business. As a result, the farmers, who were in most need of help, did not really benefit from the government's preferential polices, like tax reduction, which aimed to help them become rich.

"It is the result of a vicious circle + farmers could not provide enough guarantee for mortgage financing, thus they are unable to get enough funds for business from the bank. But the limited money seldom brought much benefit in the rural areas in Tibet, where there was a lack of communication with outside markets," said Guo Meicheng, deputy director in charge of agriculture loans in the Tibetan Branch of the Agricultural Bank of China.

"In that case, the borrower usually failed to repay the capital with interest in time and the banks, which were tied down with mountains of bad debts, would not lend money to the farmers again, " said Guo.

To change the situation, in 2001, the Agricultural Bank of China in the Tibet Autonomous Region, launched a microfinancing pilot scheme to help the poor Tibetan farmers to access capital with neither mortgage nor guarantee. Farmers were encouraged to take up varied trades that ranged from raising livestock to the production of artworks.

Guo said the bank grants borrowers three kinds of cards for loans according to the evaluation of their capacity to repay the loan + a golden card means a loan of 10,000 yuan (1,200 US dollars), a silver card for 6,000 yuan (723 US dollars) and a bronze card for 3,000 yuan (361 US dollars).

"In addition, when a copper card-carrier has enough credit to apply for more money, he can be upgraded as a carrier of a silver card or even golden card and vice versa," said Guo.

The new policy was warmly welcomed by local farmers. Baima entered the loan application office in county's the Agricultural Bank again.

"My credit was the only thing I brought when I came to the bank to apply for my first small loan," said Baima.

The bank found Baima met all the criteria for application: a favorable credit record at a bank, a stable annual family income above 1,500 yuan (180 US dollars) and a practical get-rich plan + Soon, Baima went back home with a golden card in his pocket.

A loan of 10,000 yuan (1,200 US dollars) with a 3.33 percent annual interest allowed Baima to contract with the local government to farm a 6,700-sq-m nursery of saplings, which was in great need at the markets of Bowo, one of the largest virgin forest zones in Tibet, after China banned virgin forest felling and trafficking in 2000.

Fortune snowballed + Baima now has a traffic team, a wood processing factory and a sapling nursery base, with an annual income of about 1 million yuan (120,000 US dollars). In October 2003, his family were moved out of the previous poky wooden house into a European-style villa covering an area of about 1,000 square meters.

"Baima's success has added to our confidence to carry on the small loan project," said Guo, adding that by the end of 2003, the Tibetan Branch of the Agricultural Bank of China had extended@than 600 million (72 million US dollars) in the form of small loans and over 230,000 families of farmers and herdsman, accounting for more than 60 percent of the region's population, had loan cards.

"In fact, it is a win-win deal + on one hand, the economic development in the rural areas has been speeded up as farmers, like Baima, have gradually escaped poverty with the support of small loans, and on the other hand, the banks also found a good outlet for their funds," said Guo.

The remarkable change in Baima's family sparkled hope in Doje's family, who also lived in Baqiong Village with an annual income of about 800 yuan (96 US dollars) and used to live on the relief fund from local civil administrations.

"Our bank and local government have required small loan borrowers to extend the priority to the comparatively poor families, like Doje's, when they hire laborers as the precondition to apply for more funds," said Purba, president of the county's Agricultural Bank in Bowo.

"As my credit increases, I may have a bronze card this year," said Doje, who now works at Baima's wood processing factory.

To ensure that the loans would be repaid on time, the bank would evaluate the credits of loan applicants every year and made suggestions for the investment plan of borrowers.

"During the past three years, more than 96 percent of the small loans were repaid and by the end of 2003, the per capita income in Tibet rose to 1,690 yuan (204 US dollars) from 1,342 yuan (161 US dollars) in 2000," said Guo.