At the end of October 2009 AFC/ADG completed the project "GTZ Financial Sector Development Programme, Component 1: Rural Microfinance and Rural Financial Sector Reform". The object of this project is Rishenglong Micro-Credit Company (RMCC) which is the first established Micro-Credit Company in China. RMCC is located in Pingyao, Shanxi province, approx. 700 km away from Beijing. Pingyao has a beautiful ancient city and became a Cultural Heritage Site a couple of years ago. The project started in November 2008 and focused on institutional building with the aim of a significant contribution making RMCC best-practice example for commercially viable and financially sustainable microfinance in China.

 

The following outputs could be achieved through the cooperation of RMCC with the AFC/ADG team consisting of the Team Leader Maria Stephens, Microfinance Expert Cheng Cheng and several local short-term experts:

 

Main project achievements: Carried out a demand survey: conducted interviews with farmers and microenterprises regarding their demand for financial products, behaviour and  future business plans Development of appropriate microfinance products (product with more flexible loan terms; launch of an innovative medical subsidy loan product as described below) Expansion of outreach Development of a marketing campaign and execution of promotions (TV, temple fairs, open house, brochures…) Risk assessment; introduction of internal controls; development of a risk management and internal control handbook Further development of IT / Accounting / MIS Introducing RMCC to the international MF community by attending a Microfinance Conference in Serbia and publishing its data on the MIX website Introducing RMCC to several international investors for a potential equity investment and/or a broader collaborative partnership Analysis of economic and social performance measurement with the MIX Social Performance Standards Report Introduction of business and financial planning with Microfin Improvement of organizational and HR structure; development of a HR handbook incl. selection procedures, job profiles and bonus system, training plan etc. Delivering of staff trainings on various topics e.g. cash-flow based lending, internal controls, business and financial planning, marketing Documentation of materials developed during the assignment (lessons learned, training materials, management tools) as best practice examples for microfinance in China

 

At the end of the project RMCC hold a two-day open house event to invite past, current and prospective farmers and MSME clients, to thank better-performing clients, and to show solidarity with RMCC's community of clients. The event hosted government officials as keynote speakers, and provided participants with the opportunity to learn about RMCC's development and future strategy. Moreover, RMCC management and staff had the chance to interact with participants and to get feedback about their current and prospective product design. Furthermore, the Open House gave RMCC the opportunity to introduce the participants to its newly launched Farmer's Medical Subsidy Loan Product. This product was developed in partnership with the Pingyao County Government Medical Subsidy Unit. It is a short-term, low-interest loan product intended to help rural clients pay the immediate upfront costs associated with health care services prior to applying for the Government's medical subsidy. This innovative product program will allow many of Pingyao's residents to undertake critical and timely medical care that they might otherwise not afford to undertake, which serves a strong social need within the community and supports the government's overall health care objectives.

 

 

  Round table discussions during the Open House and group picture with RMCC management and staff, clients and AFC/ADG consultant.

 

After the completion of this project AFC will further continue its work in China with three other current projects. Thereof one also focuses on the institution building of a MFI. The lessons learned of the project in Pingyao will be used in the future for adding value to the Chinese microfinance sector.

 

For further information please refer to:

 

 

Susan Gille
Project Manager
Financial Sector Development
susan.gille@afci.de