Once high hopes were placed, now under pressure—
Village banks come to the crossroads
The village banks, known as "grassroots" banks, are young members of my country's banking system. They have the advantages of being small and flexible, being close to farmers, and integrating into the countryside. They are closer to small and micro enterprises and "agriculture, rural areas, and farmers".
Since the establishment of the first village bank in Yilong County, Sichuan Province in March 2007, it has gone through more than ten years.
How is the development of the village and township bank that once had high hopes?
Have you achieved the goal of "founding a foothold in the county and supporting agriculture and small businesses"?
What changes can be made in innovative exploration?
In this regard, a reporter from the Economic Daily conducted an investigation and interview.
Earlier this year, the China Banking and Insurance Regulatory Commission issued the "Notice on Further Promoting the Reform and Reorganization of Rural Banks to Resolve Risks" (hereinafter referred to as the "Notice") which attracted people's attention.
The "Notice" proposes to support rural banks in replenishing capital and deepening reforms to effectively deal with risks.
The timely actions of the supervisory authorities revealed the current dilemma of the development of rural banks.
Village and township banks are banking financial institutions approved by financial regulatory authorities and established in counties and below to mainly serve "agriculture, rural areas and farmers" and small and micro enterprises.
After 14 years of development, rural banks have become the "micro banks" with the largest number of domestic institutions, the smallest individual scale, the most basic service to customers, and the most prominent feature of supporting agriculture and small businesses. They are supporting rural households and small and micro enterprises and boosting county economic development. Played an important role.
However, at the same time, there are also some risks that cannot be ignored in the development of rural banks. For example, a small number of rural banks’ main sponsors have vacancies, single product and service capabilities, and high capital costs. The risk level is rising rapidly, which seriously affects and Restrict its sustainable development and financial service capabilities.
Faced with these risks, has the village and township bank, which had high hopes, come to the "crossroads" of development?
What is the status quo?
Facing the new period of strategic opportunities, where will the village banks go?
Recently, a reporter from the Economic Daily conducted an investigation and interview.
Can "micro banks" work?
Village banks have the advantages of small corporate banks such as short decision-making chains and fast market response
"Unexpectedly, a desperate attempt brought the company to a big step." Talking about a "life-saving" loan in 2019, Cheng Ran, the person in charge of Shandong Ruiji Intelligent Machinery Technology Co., Ltd. expressed such emotion.
The reason for "no hope" is that Cheng Ran had asked many banks for loans before obtaining this loan, but repeatedly hit a wall, and repeatedly refused, making the "post-80s" boss so anxious that his hair was all white. less.
After hearing that a new bank called "Bank of China Fullerton" has a flexible loan mechanism, Cheng Ran put forward a loan request to the Bank of China Fullerton Village Bank in Zoucheng, Shandong with the mentality of trying it out.
Due to the excessive investment in the new factory area of Ruiji Company during the relocation, some banks have overdue records after borrowing, and they cannot obtain new financing during the development process... This is after the on-site investigation by the business staff of Zoucheng Bank of China Fullerton Village Bank The information obtained also made the business staff feel that the company's situation was complicated, unclear, unclear, and unable to determine its service plan, so they asked the bank's leadership for guidance.
What Cheng Ran did not expect was that a few days later, the bank’s chairman Jing Yuming and president Sun Lianhe came to Ruiji’s first-line production workshop to gain a deep understanding of the company’s core productivity and competitiveness, and convene the backbone of the industry’s business and risk departments. After a comprehensive analysis of enterprise products, market prospects, core technologies, industry experience, boss character, environmental protection qualifications, risk mitigation, etc., it is concluded that the only factor that restricts production capacity is the shortage of liquidity due to sufficient orders.
In the end, the bank ruled out the company's previous credit deficiencies, and the members of the loan review committee reached an agreement to design a tailor-made credit financing plan for Ruiji, and successfully issued 1.5 million yuan in new loans.
It was this loan that allowed Ruiji to double its output value that year.
During the 2020 new crown pneumonia epidemic, the company's products have also been continuously sent to domestic and foreign customers.
The cooperation between Zoucheng Bank of China Fullerton Rural Bank and Ruiji Company is a microcosm of the current relationship between rural banks and customers.
As the "micro bank" with the largest number of legal persons, the smallest individual scale, and the most basic level of customer service in the banking system, rural banks are also known as "grassroots" banks, and loans are mainly directed to county farmers and small and micro enterprises.
Compared with other types of banks, although rural banks are extremely small in scale, they have the advantages of small corporate banks such as short decision-making chains and quick market response. This makes the procedures for providing loans by rural banks convenient and short, and can compete with small and micro enterprises and "agriculture, rural areas, and rural areas." Go closer.
Such characteristics have allowed village banks to play an active role in filling the "last mile" of financial services.
According to data from the China Banking and Insurance Regulatory Commission, as of the end of September 2020, a total of 1,641 rural banks have been established nationwide, covering 1,306 counties (cities, banners) in 31 provinces, autonomous regions and municipalities across the country. The central and western regions account for 65.8% and the county coverage rate is 71.2%.
The proportion of loans to rural households and small and micro enterprises has always remained above 90%, single-family loans of less than 5 million yuan accounted for 85%, and average household loans of 305,000 yuan.
However, the development of rural banks has not been smooth sailing. Some rural banks have even encountered survival problems in their development.
In fact, Zoucheng Bank of China Fullerton is an M&A bank. Its predecessor was Zoucheng Jianxin Rural Bank. In January 2019, the main originating bank was changed from China Construction Bank to Bank of China and its name was changed.
At the beginning of the merger, the original Zoucheng Jianxin Rural Bank had a small deposit and loan scale, no bank card business, and only traditional deposit receipts and passbooks as the deposit medium. The storage method was backward; the market and customer positioning were not clear, and loans were mainly corporate customer loans. The single amount is large, and the average household loan is close to the regulatory red line; the agricultural and small and micro enterprise loans continue to decline, and the regulatory assessment continues to fail to meet the standards.
In the face of these conditions, Zoucheng Bank of China Fullerton's approach is to investigate the actual local situation and formulate a set of gradual business landing plans.
"Combined with the actual situation of local small and micro enterprises and customers of "agriculture, rural areas and farmers", we have formulated a strategy of taking the lead in the company's business to make a breakthrough, and retailing "agriculture, rural areas and farmers" to follow up quickly. ', "Lexiangdai" and "Youxiangdai" for individual industrial and commercial households, and series of credit products such as "Xinongdai" for planting and breeding farmers." In Jing Yuming's view, these products are quickly sold in Zoucheng due to grounding. Rooting and flowering.
Relying on the good business environment in Zoucheng, in 2019, BOC Fullerton Village Bank in Zoucheng ranked first in the group's 27 M&A banks in the country in terms of loan business development. The increase in loans during the year of M&A was over 100 million yuan, a new high since the establishment of the bank.
What's the problem with little influence?
There are external difficulties such as the distrust of depositors, as well as factors such as insufficient internal capabilities
The results are worthy of recognition, but in the eyes of many people, although the number of rural banks is the largest, they do not seem to have much influence.
Where is the problem?
When the "Notice" was released, the relevant person in charge of the China Banking and Insurance Regulatory Commission once stated, "The capital adequacy ratio of rural banks is 15.7%, and overall they have strong risk resistance. However, a small number of rural banks have been affected by various factors in recent years, and their risk levels have been rapid. Rising, related problems are more prominent, which seriously affects and restricts its sustainable development and financial service capabilities".
The reporter's survey in Sichuan and Chongqing, where there were a large number of village banks established earlier, found that the reasons for the small influence of village banks are both external difficulties and insufficient internal capabilities.
At the same time, the epidemic last year has increased its internal and external pressures.
From the perspective of external difficulties, due to the short development time, fewer branches, and insufficient publicity of rural banks, depositors trust them lower than other banks. They are generally misunderstood as “private banks” or informal banks. Deposit interest rates and service advantages, but the difficulty of absorbing deposits is still objectively higher than other banks.
Not only that, some insiders frankly said that as large and medium-sized banks return to the county and rural markets to increase inclusive loans, the crowding-out effect and the siphoning effect of rural banks’ loans have become prominent, and various banking institutions have adopted the advantage of low interest rates. "Tip" high-quality customers have caused serious loss of small and micro customers of rural banks, and even some small and micro customer managers have been lost to major banks.
In addition, some village and township banks stated that due to the requirement of collateral for small-scale refinancing, it is difficult for them to use small-scale re-loan or their quota is limited.
Internal difficulties are also factors that cannot be ignored.
As early as 2019, the relevant person in charge of the China Banking and Insurance Regulatory Commission pointed out at the seminar on the reform and development of rural banks that while the rural banks are rapidly nurturing and developing, there are also some outstanding problems. Job vacancy, external control, etc.
"From 2007 to the present, in just over 10 years, the number of rural banks has surpassed the rural commercial banks with decades of development history. With policy encouragement, some policy banks and large commercial banks have initiated the establishment of a number of rural banks. However, follow-up management services are difficult to keep up. From 2017 to 2018, China Development Bank and China Construction Bank packaged and transferred their 15 and 27 rural banks to Bank of China." said Dong Ximiao, chief researcher of China Merchants Union Finance.
During the investigation, the reporter also found that some village banks mainly rely on the core business system of the main originating bank for information technology. However, because the village banks and the main originating bank are different legal entities, the authorized version of the system is low or the functions are insufficient, which makes it difficult to carry out effectively. Mobile banking, online loans and other businesses have manual statistics and analysis of data, which restricts business development and cannot meet the requirements of regulatory authorities. However, relying only on their own technology and financial resources cannot solve the problem of IT system support.
These problems have become more prominent due to the impact of the epidemic.
Since the main customer groups of rural banks are small and micro enterprises and farmers, the quality of loans under the impact of the epidemic has been more affected.
Give full play to the role of rural finance
Village and township banks should “turn around for small boats” and should be truly small, pragmatic, refined, and beautiful
Although there have been some problems in the development, the importance of village banks should not be overlooked.
In the survey, many people in the industry said that despite the small size, high pressure, and many difficulties of rural banks, they also have the advantage of "small boats make a turnaround."
In recent years, supervisory authorities and rural banks have been actively exploring ideas and breakthroughs.
Initiating the merger and reorganization of rural banks is one of the explorations.
In January 2018, the former China Banking Regulatory Commission issued the "Notice on Developing the Pilot Work of Investment Management Rural Banks and "Multi-County and One Line" Rural Banks", allowing the establishment of investment management rural banks to conduct unified management of rural banks, and at the same time allowing rural banks The business area covers multiple counties and cities.
In April 2019, Xingfu Village Bank Co., Ltd., a subsidiary of Changshu Rural Commercial Bank, was approved to be established in Haikou City, Hainan Province, and officially opened in September of the same year. It is also my country's first investment management rural bank.
In August of the following year, Bank of China Fullerton Rural Bank Co., Ltd., a subsidiary of Bank of China, was officially listed in Xiong'an New District, Hebei.
In the process of development and growth, BOC Fullerton has developed a new model of mass equity mergers and acquisitions. It has successively acquired 15 rural banks held by China Development Bank and 27 rural banks held by China Construction Bank, creating a precedent for rural banks in mass mergers and acquisitions. .
At the same time, more rural banks have begun to intensify financial innovation, and under the guidance of supervision, continue to explore and launch new services and new products that are more in line with local needs.
The reporter learned from the Sichuan Banking and Insurance Regulatory Bureau that Zigong Zhongcheng Village Bank shortened the processing process from 7 days to 2 days by implementing electronic credit contracts; Ziyang Minsheng Village Bank created a patent pledge guarantee model for the sweet family in Lezhi County The farm operator customized a credit plan to solve financing problems and successfully issued a business loan of 100,000 yuan.
It is worth mentioning that in the face of the impact of the 2020 epidemic, Sichuan village and township banks have also actively innovated nearly 30 loan products.
Among them, the Guanghan Pearl River Village Bank issued the first Sichuan Agricultural Stock Exchange transaction authentication certificate pledge loan.
Sichuan Jiangyou Huaxia Village Bank cooperated with the taxation department to produce a special "tax E-loan" product with a maximum loan of 3 million yuan.
Ya'an Yucheng Huimin Village Bank launched the first patent pledge loan, small guarantee insurance loan and trademark pledge loan in Ya'an, and introduced the notarization method of mortgage of non-equity assets in rural areas.
Suining Anju Rongxing Rural Bank promoted the weighted average interest rate of new loans during the year to drop by nearly 2 percentage points compared with all loan interest rates through product innovation.
The above-mentioned rural banks are not the only ones looking for "opportunities" in the "crisis".
For example, in the face of the dilemma that it was unable to expand marketing outside during the epidemic, Zoucheng Bank of China Fullerton Rural Bank broke the traditional marketing thinking model, organized the entire bank’s employees to learn online channels and skills to serve customers in the epidemic environment, and opened up "agriculture, rural areas, and farmers", The green service channel for small and micro finance, actively communicates with small and micro enterprise customers, and promptly solves the financial needs and problems raised by the enterprise.
This makes Zoucheng Bank of China Fullerton Rural Bank not only the first local financial institution to fully resume work, but also the increase in loans in the first half of 2020 more than the entire year of 2019, ranking first among the 125 rural banks in the country with a performance of more than 140 million yuan. 3 people.
Taking a differentiated market route is also one of the current strengths of rural banks.
"Compared with our existing stock, the space suitable for rural banks is large enough. Large banks generally do not get involved in relatively disadvantaged customers who obtain small loans, and require rural banks to sink enough. As long as commercial banks and small loan companies have business, we You can find market segments in the intermediate transitional link." Jing Yuming said.
In fact, as long as the village banks stick to their positioning, they are "differentiated."
During the survey, the relevant person in charge of the Chongqing Banking and Insurance Regulatory Bureau told reporters that for village banks, it is necessary to make full use of the characteristics of "small legal persons" with fewer management levels and flexible operating methods, and to give play to the "personal relationship of village banks in close contact with rural areas and communities." "The advantage of "geographical" is to really be small, pragmatic, refined, and beautiful.
"Village banks have accumulated more than ten years of development experience in the cultivation and development of small and micro banks suitable for the characteristics of agriculture and rural areas. Village banks should further establish the goal of'small and beautiful' micro banks, stick to their positioning, focus on the main business, and cultivate the local area firmly. Stabilize the position of the county financial'small legal person', establish a sound and effective corporate governance and capital replenishment mechanism, give full play to the role of rural finance to supplement positions, and achieve sustainable and healthy development."
Qian Qingni