World Council Visits China to Explore Viability of Credit Unions
Pete Crear, CEO, World Council of Credit Unions, met with Madame Wu Xiaoling, Deputy Governor, People's Bank of China, who has taken a leadership role in the advancement of microfinance initiatives, as part of the government of China's objective to promote development in rural areas.
Madison, WI—World Council of Credit
Unions' recent visit to China explored the
potential for a credit union system in China.
Currently China's financial sector is undergoing
major changes, and World Council is working with
regulators on a fast-track plan to analyze the
impact that credit unions might have on consumer
"Rural development is now a top priority of
Chinese government, which has also recognized
the importance of consumer and production credit
to all aspects of the country's development,"
said Pete Crear, CEO, World Council of Credit
Unions who traveled with Ralph Swoboda, WOCCU's
consultant on China.
China has a history with credit unions. In the
1920s, American grant funding launched a credit
union movement in China. Although credit unions
disappeared during the chaos of World War II,
China's rural credit cooperatives (RCCs) started
in the late 1940s, influenced by the previous
credit union movement.
Over a decade ago, most Chinese banks were
solely by the government. In the current
financial environment, many commercial
banks—after adjusting to market conditions
and the difficulty of making a profit in the
rural areas—pulled out of the rural
areas. Now there are virtually no financial
institutions in many poverty-stricken areas.
Because it is difficult for people to get loans
from banks, private financing has developed,
creating a huge unauthorized financing market
which often charges extremely high interest
During the visit, World Council met with Madame
Wu Xiaoling, Deputy Governor, People's Bank of
China, the Chinese Central bank which is
responsible for administering monetary policy,
maintaining financial stability at the
macroeconomic level, and regulates credit and
fiscal services for the Chinese government.
World Council also met with representatives from
the China Banking Regulatory Commission, which
assumed responsibility for the supervision of
banks, RCCs and other depository institutions in
2003; Peking University; Rural Development
Institute; Guangzhou City Rural Credit
Cooperative Union; and the China Foundation for
"The consistent message we received from
organizations was that testing the credit union
model in poor, rural areas would be one way to
reform and restructure the RCC," said Crear. As
a result, World Council has been invited back
before the end of the year to visit some of the
RCCs and share views on whether the credit union
model would be a suitable one for the future.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 56,000 credit unions in 101 countries serve 200 million people. Learn more about World Council's impact around the world at www.woccu.org.