Technical Assistance to the People's Republic of China for Rural Finance Reforms and Development of Microfinance Institutions

This document provides details of the Technical Assistance (TA) proposed by the Asian Development Bank (ADB) to provide advisory support for rural finance reforms and the development of microfinance institutions (MFIs) in Inner Mongolia Autonomous Region (IMAR) and Guizhou Province of the People's Republic of China.The document outlines some of the features of the rural financial system of the IMAR and Guizhou Province:

• Rural Credit Cooperatives (RCCs) are the only financial institution serving rural areas;
• RCCs have long been influenced by various levels of government and suffer from problems such as unclear ownership structure, poor corporate governance, inadequate business scope and internal control.

The document then identifies some of the issues faced by the two regions:

• Long distances and economic disparity;
• Limited operational scale, poor financial performance and weak institutional capacity;
• Policy constraints;
• Poor corporate governance.

Finally, the document provides details of the methodology, costs and implementation arrangements for the TA.