Announcement of China's Rural Credit Program to Lift Thousands Out of Poverty on November 1, 1990

()R IMMIDIAll RIllAS1 SWorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 A \BANK) NEWS RELEASE NO. 91/20 Contact: Pastor Sison A NEWS RELEASE NO. 91/21 (202) 458-0344 CHINA'S RURAL CREDIT PROGRAM TO LIFT THOUSANDS OUT OF POVERTY WASHINGTON, November 1, 1990 -- A program to provide loans to farmers and entrepreneurs in China's rural areas will help lift thousands of people out of poverty, generate jobs, and boost production of food and other agricultural goods. The program is being supported by a $75 million loan from the World Bank and a credit of SDR 143.7 million ($200 million) from the International Develop- ment Association (IDA), the World Bank affiliate that lends on concessional terms to the poorest countries. The program will enable people in six provinces and several other parts of the country to borrow funds to finance investments in agriculture and rural enterprises. The program includes plans to provide technical assistance to support the development of rural financial institutions, helping them operate more efficiently and become more market oriented. The program is expected to reduce the incidence of poverty in rural areas and enable women entrepreneurs to play an important role in the rural economy. It includes measures aimed at protecting the environment. Increased agricultural production as a result of the program will eventually amount to about $600 million a year. The program will also help decrease the country's dependence on imports of some agricultural goods and provide jobs to almost 100,000 people in areas where employment opportunities have been limited. The World Bank loan is for 20 years, including five years' grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. The IDA credit is for 35 years, including 10 years' grace; it carries no interest, but has an annual charge of 0.75 percent on the disbursed balance and a variable charge (currently zero percent) of up to 0.5 percent on the undisbursed balance. Note: Money figures are expressed in U.S. dollar equivalents. IDA credits are denominated in SDRs (special drawing rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.