Thursday, June 30, 2016

China establishes an agricultural credit guarantee



David Nealis in soybean field

China establishes an agricultural credit guarantee company

The Chinese Ministry of Finance has informed us that China has established an agricultural credit guarantee company.
The non-profit firm is a policy guarantee institution which was established by the China Banking Regulatory Commission (CBRC), the Ministry of Finance and Ministry of Agriculture.
The Ministry of Finance has said that the initial funding of the company was more than 4 billion yuan ($611 million), including 3 billion yuan from the State Treasury and the remaining came from 11 provincial-level guarantee institutions that already exist.
They also stated that they expect the capital to increase to 15 billion yuan over the next three years as more organizations join the agricultural credit guarantee company.
According to the Ministry of Finance the goals of the company are to set national re-guarantee business standards, and off re-guarantees to all provincial-level guarantee organizations and developing agricultural credit guarantee products.

We at Ceres expect this to have a positive impact on the Chinese farmer’s cash flow and give some much needed financial relief to small and midsize Chinese farms.