The People's Bank of China ("PBC") has recently distributed the Guiding Opinions on Ensuring Practically Effective Financial Work on Targeted Poverty Alleviation in 2019 and 2020 (the "Opinions").
The Opinions state that there is a need to improve the monetary policy transmission mechanism, strengthen the management of re-loans granted for poverty relief purposes, and put into effect the policy on targeted reserve requirement ratio (RRR) cuts for inclusive finance, adding that all financial institutions in the banking sector shall assist the poverty-stricken areas in developing distinctive industries that are favorable to poverty alleviation, deepen the benefit connection mechanism for industry-based poverty relief, and facilitate the effective integration of financial support and industry-based poverty relief. Meanwhile, the Opinions expressly state that they shall make the financial system more inclusive and improve the financial environment in impoverished areas. They are also required to standardize and improve the management of small-amount credit loans in support of poverty alleviation, properly deal with loan renewals and loan extensions, take positive measures in advance to get well prepared for the likely imminent rush period of repayments, and improve the management and use of risk compensation funds for small-amount credit loans in support of poverty alleviation. Moreover, the Opinions call for overall and effective work on the linkage between policies on finance-based poverty relief and financial service policies for rural revitalization, in a bid to raise the level of financial services for rural revitalization.