Zhejiang County Decoding- How does financial -living water- nourish the common wealth road of mountainous counties-
In an interview conducted in Lishui, Zhejiang province, we explored the vibrant autumn scene that follows the frost’s arrival in the picturesque southern mountainous region. Tourists flock to Jingning’s Dajun Ancient Street, engaging in photography, sketching, and experiencing the unique traditional marriage customs of the She ethnic group, breathing new life into this serene locale.
One local resident, Zhao Zhongyan, is contemplating opening a guesthouse to cater to the increasing influx of visitors and to support her family. However, she faces a significant hurdle: obtaining the necessary startup capital.
Zhao’s challenge reflects a broader issue faced by rural areas striving for transitional growth. Financial support is critical to the comprehensive revitalization of these communities. In response, Lishui has developed innovative financial products, such as “ecological pledge loans,” which allow ecological assets to be used as collateral, effectively converting ecological products into capital.
Jingning is notable for being the first town in China to publish a GEP (Gross Ecosystem Product) accounting report at the township level, quantifying its mountains, waters, forests, fields, and even the air. Seizing this opportunity, Jingning Rural Commercial Bank launched “ecological credit loans,” enabling locals to benefit from GEP dividends. With this support, Zhao was ultimately able to secure a crucial loan, alleviating her financial stress.
As of September 2023, Lishui’s various ecological pledge loan products—including GEP expected yield pledge loans, forest rights mortgage loans, and loans backed by compensation for public forest benefits—have reached an outstanding balance of 31.975 billion yuan (approximately $4.4 billion). This initiative not only invigorates ecological assets but also expands financing avenues for farmers.
Since being designated a pilot area for promoting inclusive financial services in rural revitalization in September 2022, Lishui has been exploring key areas such as realizing the value of ecological products, digital inclusive finance, and innovations in rural financial services. Among the notable initiatives is the “Two Small” Entrepreneurship platform, aiding small supermarkets and inns run by residents who venture outside their hometowns—an important channel for economic development in the area. Estimates suggest there are over 60,000 supermarkets and inns operated by Lishui residents across all 31 provinces in China, generating annual revenues exceeding 100 billion yuan and creating over 240,000 jobs.
To address the common financing challenges faced by this “Two Small” group, Lishui created a platform uniting 12 commercial banks to offer financial support for entrepreneurs. Over the past two years, the platform has facilitated various financial services, including loan interest subsidies.
On September 19, a new public insurance initiative was launched to support small supermarkets and inns. Spearheaded by the People’s Insurance Company of China, this program offers one year of comprehensive insurance coverage to eligible businesses, with each policy providing up to 450,000 yuan in protection.
In addition to these innovative financial products, Lishui is also enhancing financial infrastructure to close the gap in rural financial services. Recently, the first village-based credit inquiry service was established in Beixi Village, featuring internet access and assistance for residents in checking their credit scores.
Located 19 kilometers from the county seat, Beixi Village has capitalized on its natural resources, diversifying its economy with projects like rabbit farming, tea and fragrant pine cultivation, rural healthcare, and red tourism. As awareness of personal credit grows among villagers, we see a shift in how they approach financial management.
For instance, Ms. Wu, who runs a small store, encountered difficulties securing a business loan due to multiple unintended online loan applications made in error. Now, she has adopted the habit of regularly checking her credit report—a much easier task thanks to the new local facilities.
By 2024, the People’s Bank of China will expand its “Ten-Minute Credit Report Inquiry Zone” initiative in Lishui. By August 2023, 230 credit service points had been established across the city, allowing for over 69,000 self-service inquiries.
A representative from the Lishui branch of the People’s Bank of China stated that plans are in place to extend these services to other villages and communities, enhancing the rural credit system and improving inclusive financial services for agriculture and rural areas, thereby supporting the region’s journey toward shared prosperity.
