October 25, 2006
Association for Rural Development in Yilong was established in November 1995 as a non-governmental organization. Today, ARDY has 23 workers (1 worker has more than one job) with 8 of them college graduates and 3 with intermediate education. The Association has 3 departments and 1 office (Credit Department, Development Department, Financial Department, and Office) as well as 6 branches (Zhouhe, Yongle, Shuangsheng, Wupang, Biquan, and Fuxin). All the various assets add up to more than 800 million RMB, For more than ten years, ARDY uses the people-centered approached to provide organization, techniques, loans, and communication services to farmers in poverty.
I. Adhering to Being People-Centered and Providing Services to the Poor Communities
Since the Association was found 11 years ago, ARDY practiced “people-oriented sustainable development in rural areas” with the help of international organization’s support and funds. ARDY always works on the front line, working for the progress of those in poverty. On one side, the Association gets involved and offers organization, technique, and communication services to 20 towns, 100 farmers’ organization centers, 3000 farmer groups, and 1 million people. On the other side, the Association uses microfinance to give farmers capital support, loaning out 50,000,000 RMB and helping out almost 100,000 people in poverty. This allowed 14,000 households with about 80,000 people to get out of poverty and 15,000 people towards wealth. At the same time, ARDY gradually increased its own capacity to self-develop and provide services, establishing a road for development. The Association’s role, position, and effective management obtained good results and recognition from national and international counterparts.
II. Conforming to Social Development, Meeting Challenges, Bolding Reforming, and Constantly Exploring Mechanisms for Sustainable Rural Development
Because of the reforms in the country’s government and economy, there will be new problems within the farmers’ societies. We are not afraid of these problems and will confront them as they come along. On one hand, we will be able to strengthen our self-capacity. We can also generate the Association’s development, management, information acquirement, accounting, and risk control in a strict, scientific manner. On the other hand, we can alter our goals, position, and strategies according to society’s changes and what we have learned. We will then make a summary of our internal management system and development strategies in September 2004. We will then put in efforts to solve our core problems, boldly attempt new things, establish an internal governmental structure, and modify the system to begin our second development. Up to now, the Association has maintained the employees’ sense of responsibility and elevated their desire to accomplish their missions. We also have tight control over the quality of risk management while we broaden coverage and keep our credit healthy. Tight credit risk management and effective quality control system secure the large number of microfinance loans.
By the end of September 2006, the main operating indicators of the branches include:
Since the implementation of the new mechanism two years ago, it had risk control that meet high standards, effective services, and self-financing that matches international levels. The mechanism has been recognized by national counterparts. People from People’s University of China and Tsinghua University have come to ARDY to study and invited Secretary General Gao XiangJun to speak in other organizations. Even the provincial, municipal, and county banks have sent experts and leaders 4 times to ARDY to understand the successful microfinance management. At the same time, international organizations also sent representatives to inspect and learn, building good working relationships.
III. Actively Explore and Help Poor Villages Establish Farmers’ Organizations. Promote and Support Technical Management and Operation. Receive Recognition and Support from the Government and World Society.
On the basis of our microfinance and growth, we continue to adhere to poverty alleviation and rural development. We hope to actively integrate the farmers into society and invent new mechanisms for the vulnerable groups and peasant communities to organize themselves. We want to rid of problems of the lack in capital, skills, and communication.
Over one year of experimentation, we have received initial results. We now have established 17 farmers’ organizations. Their conditions:
After the formation of farmers’ organizations, the Association has devoted completely to guide and help them. The area for each farmers’ organization is divided into 2-3 regions depending on the size of their community and living conditions. Every month, there will be activities, technique trainings, and interchange at one of the regions. As of now, this has been held at least 200 times with 10,000 people participating.
In addition to activities, farmers’ organizations have also worked collaboratively in food processing and selling goods. Right now, they have already jointly bought and distributed 256 tons of various fertilizers, 20 tons of cocoons, 5000 marketable rabbits, and 5 tons of processed feed. In this way, they lowered the production costs and increased production revenue by nearly 10,000 RMB.
The organizations also use mutual funds to provide more convenience to the villagers’ production and living. If someone is in need of money, s/he will receive a loan. Those who receive loans will have the means to repay them. The financial revenue from microfinance does not only cover the basic costs for running the farmers’ organizations but also allow for bonuses to shareholders. As of end of September, the organizations’ conditions are the following:
The farmers’ organizations we have constructed have achieved sustainability and vitality after running them for a year. They have received recognition and approval from societies all over the world. After learning about the farmers’ organizations, Office of Poverty Alleviation and Development and National Ministry of Finance arranged a fund of 21 million RMB for 14 provinces and 28 counties to pilot ARDY’s microfinance practice.
IV. ARDY’s Development Mechanism and Direction
At present, the Association will support and help link the villagers’ funds with the farmers’ organizations. In addition, there will be interaction and interdependence between these organizations and the association so that there will be sustainable relationship. We hope to establish a complete system that can not only be self-financing but also help service and give loans to the low-income populations. The mechanism is as follows:
ARDY: Corporation to help promote the establishment of village mutual funds and their financial control, financial services, and training. Provide activities to support balance village funds. Supervise the community banks.
Branch: To become step by step into joint-stock community banks in charge of own risk control. Main job is to service customers in the community and offer them loans for production.
Farmers’ Organization: Mutual funds managed by the villagers. Give out all kinds of loans from production to living. Each loan is independent. A second loan will be given out if the first one is repaid.This entire system is based upon the effectiveness of the community banks’ operations. Looking at the conditions of the Association and the various community banks, the financial services are all sound whether it is the employees’ potential, risk control, customer development, or capital quality. Our theory and practice are feasible. Presently, we have started to promote our entire system and hope to attract the attention, participation, and support of society. We also hope to service more people in poverty, promoting rural sustainable development.