CICC-Guicheng farming-benefiting micro-credit asset-backed program of RMB4 billion received a no-objection letter from the Shanghai Stock Exchange (SSE) on March 20, making it the 1st asset-backed securities product for revitalizing rural areas and supporting poverty relief in China. It represents an effective combination of farming-benefiting policies with "blood-making" poverty relief in asset securitization and offers financial innovation for urban and rural low-income groups, disadvantaged groups, rural poverty-stricken groups and entrepreneurial farmers to realize self-reliance and overcome poverty through scientific and technological financial services.
General Secretary Xi Jinping put forward the rural vitalization strategy in the Report of the 19th CPC National Congress and made clear that issues relating to agriculture, rural areas and rural people are fundamental to China as they directly concern our country's stability and people's wellbeing and addressing these issues should have a central place on the work agenda of the Party. In the "Opinions of the CPC Central Committee and the State Council on Implementing the Rural Vitalization Strategy" released in February 2018, it is clearly pointed out that getting rid of poverty is the pre-requisite of rural vitalization, and the targeted approach to alleviating and overcoming poverty should be adopted to stimulate endogenous power of poverty-stricken people. The above "Opinions" also points out that increasing the financial service level is a must for implementing rural vitalization strategy, and the focus of inclusive finance should be put on rural areas. The China Securities Regulatory Commission (CSRC) issued the "Opinions on Playing the Capital Market's Role of Serving the National Poverty Relief Strategy" in September 2016, which also stipulates that the role of capital market should be given full play to in serving the national poverty relief strategy.
Huaneng Guicheng Trust Co., Ltd. is the originator of this program. Based on the rural e-commerce system and risk management system, it will accurately identify the capital demand of a poverty-relief target through rural partners and leading enterprises in the rural supply chain, issue a loan to him/her for his/her production and operation, and engage in securitized financing on the basis of this loan. Rural financial business has been available in 816 national-level poverty-stricken counties and contiguous poverty-stricken areas in 22 provinces in China; the loan of RMB3.8 billion has been issued to 1.86 million micro and small enterprises in poverty-stricken counties; and the loan of RMB32.5 billion has been offered to 930,000 users in rural areas, in a bid to support them in engaging in production, breeding and rural ecology industry. The launch of this program will provide the above-mentioned farmers with convenient financial services, which will effectively solve the high-cost and low-efficiency issue of rural finance and also facilitate the good circulation of "accurate supporting and blood-making poverty relief" in rural vitalization.
The successful launch of this program is an innovative measure of the SSE to support the development of inclusive finance in rural areas, focus on targeted poverty alleviation and boost internet technology to serve poverty alleviation under the leadership of the CSRC. It has further expanded financial service's role in rural vitalization and enhanced the efficiency and accuracy of serving rural areas, especially small and medium-sized farmers. And it is of exemplary effect and can be duplicated in other fields. Next, the SSE will continue to implement the guidelines of the Party Central Committee and the State Council and give full play to the role of the capital market in accordance with the arrangement of the CSRC, thus boosting the all-round upgrading of agriculture, overall progress of rural areas and comprehensive development of rural people from multiple perspectives, in different fields and by diversified methods with targeted poverty relief as the core and with institutional innovation as the impetus.