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Chinese Bank Gives Tuition Loans to Poor College Students
With no guaranty attached, tuition loans have been given to six poverty-stricken students attending Normal College in southwest China's Chongqing Municipality.
After signing loan contracts with the Chongqing branch of the Shanghai Pudong Development Bank, the students will get their loan money without assurance of financial warrantors.
The maximum sum of the seven-year loans is 40,000 yuan (4,800 US dollars), according to an official with the bank.
"It is the first time that a commercial bank has issued education loans to college students," said Zou Yu, a university official. Seventeen more students will sign similar loan contracts with the bank soon, he added.
The students' loan applications were recommended to the bank by the college based on their outstanding grades, good character, credit history and health condition, Zou said.
Last year, only 100 college students obtained financial aid from a national education loan program, which was established in the same year with a total loan volume of 700 million yuan.
But those loans cannot be given to most of poor students because they can't find loan warrantors, which the program requires, according the bank official.
China's personal credit system is still in its infancy. If no valid financial assurance and credit history is provided, banks often hesitate to grant loans to individuals, he explained.
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