Congratulations to this week’s winner of the Raffle for Institutional Action Plan submitters, the China Foundation for Poverty Alleviation!
The China Foundation for Poverty Alleviation (CFPA) Microfinance is China’s largest MFI and has been focusing on poverty alleviation for 16 years. We currently run 53 branches across 13 Chinese provinces and have maintained a client base of 100,000 since 2011. We target economically active low-income people and provide them with unsecured credit loans for the development of their agricultural interests or their small businesses, providing a strong solution to poor farmers’ shortage of capital. We are also very sensitive to gender issues. By the end of 2011, female borrowers accounted for 91% of our total active clients.
Microfinance as a concept was introduced to China in the early 90s and its original pattern has undergone great adjustment to be successfully operated within the Chinese social and economical environment. As one of the earliest MFIs in China, CFPA Microfinance not only stands the test of time but has added positive contributions to the development of the industry by actively sharing experiences with other organizations. We design our products with rural households’ best interests and demands at heart. Household surveys and market analyses are carried out periodically and lead to improvements on credit policies and loan services.
In 2011, CFPA Microfinance disbursed 111,237 loans, totaling RMB 1,074,256,700 (approximately USD$ 168,195,516.72), a growth of 60.71% and 88.76% year-on-year, respectively. The average loan size of CFPA Microfinance was RMB 9,657 (about USD$ 1,512), less than a quarter of the GDP per capita of China. 78% of loans were less than RMB 10,000 (around USD$ 1566), 7.3% of loans were less than RMB 5,000 (about USD$ 783). Throughout the whole year, CFPA Microfinance provided regular agricultural technical training activities conducted by local agricultural experts and provided clients with professional technical advisory services. It has also distributed over 10,000 books and other useful technical materials to its clients free of charge and trained nearly 20,000 people.
2011 was CFPA Microfinance’s “year of risk control”. Emphasizing the goal of “safety first and sound development”, the Company continued to improve its risk management system, enhance awareness of risk management, and focus on initiatives aimed at reducing risks associated with credit and personal safety. Following six months of preparation, a risk management department was formally established at the end of 2011, further strengthening the company’s risk management system.
In 2008, CFPA Microfinance was transformed into CFPA Microfinance Management Co., Ltd and given the responsibility for implementing and managing microfinance pilot projects. The company insists on the double bottom line principle and has put an even greater emphasis on managing its social performance since last year. A social performance working group was set up and social performance management was formally integrated into the corporate governance structure. The working group will submit a social performance report to the board of directors every six months.
In 2012, CFPA Microfinance will focus on its three major goals of “enhancing strength, maintaining steady growth and expanding influence” by further improving governance, growing capabilities, and reinforcing a solid foundation. First, the company will increase investments in streamlining processes, building systems, and training staff to further consolidate its foundation; second, aligned with the premise of risk control, the company will expand its business while maintaining stability, assigning priority to the poorest communities. Finally, the company will strengthen exchanges within the industry, promote public awareness, and undertake its social responsibility to promote the sound development of the non-profit microfinance industry.