China has opened 18 rural community banks by the end of May offering farmers easier access to loans and providing credit to businesses in the countryside that want to expand.

The small lenders include nine village banks, three loan firms and six rural cooperatives in six pilot regions of Jilin, Hubei, Sichuan, Qinghai,Gansu and Inner Mongolia.

The rural community lenders have improved financial services in rural areas, said Tang Shuangning, vice chairman of the China Banking Regulatory Commission (CBRC).

By the end of May, community banks had deposits of 55.23 million yuan (7.17 million U.S. dollars) and had issued loans of 138.43 million yuan. They are able to raise capital by borrowing from other banks.

Sixty-one percent of the loans were used to boost the development of small-and-medium sized enterprises and 36 percent went to individual farmers.

The Huimin Village Bank, which started operations in Yilong County of Sichuan Province on March 1 this year, was the first community bank to open after the CBRC made it easier for them to be established.

The registered capital requirement was lowered to 3 million yuan for banks in counties and 1 million yuan in villages and towns.

China has been trying to find new ways to provide financial services to its vast countryside after most state banks withdrew their rural outlets in the late 1990s, leaving behind only the Agriculture Bank of China, rural cooperatives and postal savings banks.

Source: Xinhua