On June 5-8, 2009, China’s Grassroots Finance Forum is holding the Second Grassroots Finance Forum and Microcredit Organizations Training Worshop on  in Beijing.

This workshop is right in time in China, as the need for micro-finance services in China’s vast rural areas is ever greater during the current economic situation, and the recent promulgation of relevant policies has boosted the number of businesses and organizations in the micro-finance field.

The recent policy changes opened up new space for micro-finance services in China. At the end of 2007, the China Banking Regulatory Commission (CBRC) lowered the threshold for financial institutions to do business in the rural areas, allowing investments to go into village and town level banks, loan institutions, and village co-operatives. Later, the government unveiled a policy to encourage experimenting with micro-finance services in a number of regions in China.

Microcredit organizations offer a new path for securing credit for China’s vast low-income rural populations, breaking through the funds bottleneck that small and medium enterprises have encountered, especially in the current economic situation.

With the support and encouragement of local governments, various micro-credit institutions are sprouting up across China. According to an interview with Liu Kegu, a member of the Chinese People’s Political Consultative Conference (CPPCC) and former vice president of the China Development Bank, China’s micro-finance falls into four categories:

1. Rural community micro-credit projects that have been initiatives and supported by China Foundation for Poverty Alleviation since 1996. The program covered 26 poverty-struck counties in 11 provinces, serving over 28,000 families in rural China with up to 300 million RMB of investment.

2. A Indonesian farmer+merchant model implemented by China Postal Service Bank piloted since 2007 with over 37 billion RMB’s investment.

3. A European “capital+technology” model piloted by China National Development Bank since end of 2005 in 12 mid-level cities, with a total investment of over 4.6 billion RMB.

4. Micro-credit companies supported by China’s People’s Bank and capital-cooperatives piloted by CBRC since two years ago, with a total investment of over four billion RMB.

China’s microcredit organizations face a series of problems, including controlling risk, technology to manage loans, securing follow up funds, and regulation.

The Second Grassroots Finance Forum and Microcredit Organizations Training Workshop is designed to increase the overall quality and professional skills of microcredit organization employees, aid microcredit organizations to steadily operate in credit markets and achieve sustainable development.

(Translated and edited by Peiting Li and Xing based on the following Chinese-language articles http://www.cgjr.org/Article/2009-04-18/20090418234503_1024.shtml and http://www.cgjr.org/Article/2009-04-10/20090410120959_1013.shtml).