Are modern credit cooperatives the best way to serve Chinas rural poor?
China is home to the world’s largest credit cooperative movement, serving an estimated 200 million households, most of them poor farmers. For more than 50 years, that system has been the primary source of basic financial services for China’s rural poor. Even within the modern economic powerhouse that China has recently become, the rural credit cooperatives (RCCs) hold 12% of all bank deposits. They account for more than 90% of legitimate agricultural lending in an economy where almost half the workforce still farms the land. Now in the midst of a major government- engineered reform, RCCs are undergoing profound changes. The outcome of those changes will determine whether RCCs can develop into true mutual institutions or will have to sacrifice their cooperative structure to become a collection of relatively small commercial banks. World Council of Credit Unions (WOCCU) and the People’s Bank of China (PBC), the country’s central bank, have partnered to assess the progress of RCC modernis
