Tibet's First Microcredit Company Established

On April 11, 2010, Tibet’s first Microcredit Company (MCC), Tibet Yurong Microcredit Company (TYMCC), was established in the Tibet Autonomous Region capital of Lhasa. TYMCC has a registered capital of RMB 50 million (USD 7.3 million) provided by private investors. During the inauguration ceremony, TYMCC signed loan agreements with herdsmen from Cai Gongtang County and Na Jin County. TYMCC will cater to the financial needs of small and medium-sized companies, farmers and herdsmen of the autonomous region. Their aim is to improve the livelihood of the poverty-stricken population.

 

Tibet’s economy has grown tremendously over the last half decade with the provincial GDP doubling from 2006 to 2010[1]. As of 2009, Tibet’s GDP reached RMB 43.7 billion (USD 6.4 billion)[2]. But with the growing economy, the needs for financial services are also growing in order to cater to the new small businesses and entrepreneurs.

 

MCCs, first piloted by the People Bank of China in 2005, are non-financial institution delivery models of micro-credit services. With the pilot expanding country-wide in 2008, China at of the end of 2009 had 1,334 MCCs in China, extending over RMB 76.641 billion in loan capital, accounting for only 0.19% of the Chinese banking sector[3]. Since the inception of MCCs in 2005, the model has grown rapidly, yet it only encompasses a small percentage of the loan activity in China. As the first MCC in Tibet, TYMCC will hopefully serve as a successful example of a sustainable microfinance institution able to serve the truly lower segments, and pave the road for future MCCs to be established in the area. Sustainability and success will in part depend on how it designs its distribution model for loans and repayments, as much of the Tibetan population is nomadic. PlaNet Finance China is excited to hear of this recent development and hopes to see much more similar news in the near future.

 

Source: http://news.xinhuanet.com/english2010/china/2010-04/11/c_13246593.htm