Rural Financial Institutions

Abstract

For a long time rural areas have been served by a small number of formal financial institutions: the ABC, the RCCs, the postal savings system (Box 5) as well as the Agricultural Development Bank of China¹ (ADBC), a policy bank. Their main role is to provide financial services to local farmers and agricultural enterprises and to support the economic development of rural areas. Since the level of financial intermediation has remained poor in rural areas, CBRC opened competition to other institutions such as village and township banks, loan companies and mutual aid finance groups (see chapter on new forms of financial intermediation). At the same time the reform of the RCCs has produced rural commercial banks and rural cooperative banks.