Rural Finance Sector Programme

The programme was designed for implementation at the national level, but it initially affected a selected geographical area where poor people eke out a living through dryland farming and by migrating to other areas to work as seasonal or short-term labourers.

The programme’s objective is to enable poor rural people to improve their livelihoods by increasing their access to financial services. To help achieve this objective, IFAD supports the rural finance sector and the current government policy to reform rural credit cooperatives (RCCs). The aim is to turn the credit cooperatives into sustainable microfinance institutions for the benefit of poor rural people and women in particular. IFAD-funded rural development projects in China have demonstrated that RCCs are able to assist poor people if appropriate measures are properly designed and embedded in government policies. Once a proper policy environment is in place, the RCCs can play an important role in poverty-stricken areas of China.

The programme provides funds to pilot new policies, particularly in the microfinance sector. It underscores the importance of lending policies that provide better access to RCC loans, and of institutional and operational policies that increase the efficiency of institutions and contribute to financial sustainability.