While China has reformed its financial system in tandem with its economic development, there are areas where benefits have been slow to reach people. One such area is the vast rural landscape. There, the absence of established credit information databases like those in urban centers prevents many borrowers nbaブックメーカー obtaining loans nbaブックメーカー formal financial institutions. In particular, farmers, women and small-business owners who lack collateral face a “credit barrier,” forcing them to rely on high-interest informal finance. This situation undermines their economic independence, and is a factor that exacerbates inequality. In response to this challenge, one company has remained committed to its mission “Improving Rural Life,” investing in human resources to stand alongside farmers even in the digital age. The team at Sumitomo Mitsui Banking Corp (China) Ltd. (SMBCCN) shared this commitment. In the past, they had explored a collaboration on Publicly Offered Asset-Backed Securities (ABS)* for a broad investor base, but the plan was shelved subject to regulatory restrictions. However, a renewed collaboration became possible once the bank gained the capability to handle a more flexible method known as a “Collective Trust Scheme,” reviving the project to tackle this challenge through finance. *Asset-Backed Securities (ABS) are financial products created through a process known as asset securitization. Asset securitization is the process of turning illiquid assets into liquid, tradable securities. This allows originators to pool individual assets and sell claims on future income to investors as bonds or notes.
Creating a Tailor-Made,
Project-Specific nbaブックメーカー
nbaブックメーカー to
Achieve
Financial Inclusion
The project is named Shi Sui,
meaning “gleaning.” The name embodies the spirit of valuing all of society’s resources and aiming for a sustainable world. Guided by this philosophy, the team used the “joint trust” method to create a new financial product backed by the client’s loan receivables nbaブックメーカー rural areas, establishing a mechanism to raise funds nbaブックメーカー institutional investors and others. At its core was the “Social Responsibility Framework” that clearly defined the use of proceeds to ensure that the raised funds would reach those who genuinely need support.
Liwen Wei of the IVBD at SMBCCN, who is a member of the Sustainable Finance nbaブックメーカー, explained its importance.
“We reached a consensus that the client is focusing on deepening its impact in rural areas, especially with women as a priority population. To give form to this shared vision, it was essential to build a social nbaブックメーカー tailored to this specific deal to help our client accurately select the eligible loans for support.”
Building on the client’s existing international-standard framework, the team engaged in sustained dialogue with stakeholders to reflect nbaブックメーカー’s domestic rural revitalization policies and the bank’s internal regulations. Alignment with international standards proved difficult: at one point, they even considered removing the “social responsibility” label. However, the team remained committed to the original goal of financial inclusion and kept the label. Thus, the team completed a unique and highly effective framework that ensures the funds would reach those most in need.
Overcoming the
Unprecedented Challenge of
a “Mixed Loan Pool”
Through
Interdepartmental
Collaboration to Provide Approximately 600 Million RMB
in nbaブックメーカー
Although the unique framework was complete, another barrier stood in the way of the project’s implementation. The assets backing the investment were a “mixed loan pool” of diverse loans, making it extremely difficult to forecast future risk.
Pengsiqi Chang nbaブックメーカー IVBD, who was in charge of investment, recalled. “At the very beginning, we thought it was the usual standard product, but after a detailed discussion with the risk management department, we found assets were included that required a special procedural application under a really compressed timeline. We explored feasible risk approaches used in pioneering deals in other regions and worked with the planning nbaブックメーカー to arrive at a solution.”
This close, interdepartmental collaboration bore fruit, and the nbaブックメーカー overcame this challenge by developing a product manual specific to this deal.
This initiative delivered approximately 600 million RMB in funds to rural areas and diversified the client’s financing channels. For SMBCCN, it also signified a full-scale expansion of investment into the agricultural sector. Qiongwen Zhang of the IVBD, who was responsible for structuring the deal, shared her thoughts on its significance.
“The 600 million RMB figure is modest relative to our overall bond portfolio. However, what mattered was that, for us, it was a ‘journey nbaブックメーカー 0 to 1.’ Previously, our green bond assets were limited to EV auto loans, but now we consider our expansion into the new field of agriculture highly significant.”
The initiative also received strong internal recognition, receiving the “Best Deal Award 2024-Transform for the future-Shakakachi Gold.”
Beyond the “Journey nbaブックメーカー
0 to 1”: Expanding the Reach of
nbaブックメーカー
Finance to Enrich the
Entire Community
The team now aims to provide more creative financial solutions to help the client build its business strategy nbaブックメーカー a long-term perspective. Wei expressed her dedication to contributing to the correction of gender disparity through finance. “In this social nbaブックメーカー, our main targets are underserved populations, especially female borrowers and women-led small-scale enterprises. The rights of women, and for women to get resources, are rights for all people.”
While cost constraints due to China’s low-interest rates are a concern, the plan is to make this initiative sustainable by exploring every possibility, including the use of sustainable funds, green subsidies and support nbaブックメーカー the bank.
Chang concluded with a powerful statement about the future this project aims to create.
“The true value of finance is not merely in supplying funds. It lies in integrating data, technology, and the trust and risk management expertise built over many years, where mechanisms can be created to enable borrowers to develop stronger skills and increase their incomes through the repayment process. When that happens, nbaブックメーカー value compounds like interest.”