After delivering a speech to students at Peking University on Wednesday, Her Majesty Queen Máxima of the Netherlands met with two of CFPA Microfinance’s clients in the rural village of Anyang in Laishui County, China.
Laishui County, located more than 90 kilometers southwest of Beijing in neighboring Hebei province, is nationally considered to be within the Yanshan-Taihang poverty belt, one of the poorest regions immediately surrounding the capital. Anyang village is located in the center of Laishui County and is home to nearly 3000 people, most of whom are farmers. CFPA Microfinance first set-up its pro-poor grassroots microfinance operations in Laishui in 2003 as a way to support community agricultural development, and currently has 28 active rural women clients in Anyang with an outstanding loan balance of RMB 272,000 ($44,000).
Queen Máxima arrived in Anyang just after 2pm, accompanied by CFPA Microfinance Chairman He Daofeng and General Manager Liu Dongwen. She visited with 42-year old sheep raiser Zhang Guijuan and 41-year old tomato farmer Zhou Guozhi. Each took out CFPA Microfinance loans of roughly $1800. Guijuan used her loan to increase the number of sheep she raises from six to twenty, while Guozhi, who started to commercially grow greenhouse tomatoes in 2012, used her loan to buy plastic film to weatherproof her thirteen greenhouses this winter.
During her visit, Queen Máxima asked the two clients about their main sources of funding, repayment pressures, credit channels and other issues they face. Zhang Guijuan replied that her main source of revenue is the couple's home-run transport business, but that she started raising sheep in 2013 as a way to supplement her family’s income.
“Previously, I’d never been approved for a loan with another financial institution,” Guijuan said. “But I’m already on my second loan with CFPA Microfinance.”
Zhou Guozhi, who just borrowed her first loan from CFPA Microfinance last month, said that because she is still within the two-month grace period that is characteristic of all of CFPA Microfinance’s group loans, she doesn’t feel any pressure to repay. Like Guijuan, she struggled to find other financial institutions who would lend to her without collateral or a formal credit history.
“I applied for other bank loans but got turned down for all of them,” she said. “CFPA Microfinance got me a loan within three days. If it weren’t for them, I wouldn’t have been able to afford the plastic film for my greenhouses.”
Queen Máxima listened carefully to their answers, going so far as to suggest that Zhou Guozhi consider further expanding the scope of her tomato planting business by buying up neighboring greenhouses.
Queen Máxima’s visit to China came at the invitation of the Chinese government in her capacity as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. As part of that role, she advises Secretary-General Ban Ki-moon and works worldwide to promote the importance of financial inclusion in the global order and make financial services accessible to all, including low-income groups and SMEs. She has been the honorary chair of the G20 Global Partnership for Financial Inclusion since 2011 and served as one of the UN Advisory Panel members for 2005’s “International Year of Microcredit.”
With a background in banking, she has shown particular interest in the financing situation within China’s rural areas, and spoke at length with CFPA Chairman He Daofeng about the developments and prospects of microfinance in China.
The choice of Queen Máxima to visit CFPA Microfinance was precisely because of the organization’s unique niche as a grassroots microfinance institution that caters specifically to low-income, rural individuals. CFPA Microfinance is the largest anti-poverty microfinance social enterprise in China, providing on-site, zero collateral financing solutions to the funding needs of poor farmers and entrepreneurs. Of its 224,000 clients in 132 provinces across 16 provinces, 99% are farmers, 93% are women, and 98% have been previously excluded from accessing loans from formal financial institutions.
As part of her visit, Queen Máxima will also meet with Chinese President Xi Jinping, the People’s Bank of China, the China Banking Regulatory Commission, various other financial institutions, and Chinese internet businesses to see how they can help bottom of the pyramid individuals attain better access to financial services. Queen Máxima’s visit is likely to further promote inclusive finance in China, and spur increased support of microfinance institutions like CFPA Microfinance that are committed to the country's rural economic development.