The Agricultural Development Bank of China (ADBC) has been given the go-ahead from the state banking watchdog to provide loans to small agro-firms all over the country this year.
The China Banking Regulatory Commission has approved the issuance of the loans by all ADBC branches to small firms involved in the planting, breeding, processing and distribution industries after a pilot scheme was deemed a success in four provinces.
In a bid to modernize China's rural areas, ADBC was given the nod to issue the loans from four branches in Shandong, Jiangxi, Fujian and Chongqing in March last year in what was described as a "breakthrough" for the policy bank whose loans mostly go to large government-designated agricultural and rural projects.
By the end of March this year, these branches had issued 1.15 billion yuan (143.75 million U.S. dollars) of loans to 186 agro-firms.
The bank has forecast a loan demand of more than 30 billion yuan from small agro-firms in 2007.
China set up ADBC and two other policy banks - China Development Bank and the Export-Import Bank of China - in 1994 as key channels of policy financing, a move that enabled the "Big Four" state commercial banks to be solely devoted to commercial business.
The "Big Four" state commercial banks are the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China and China Construction Bank.