MADISON — The Chinese government has turned to the World Council of Credit Unions for help in establishing credit unions in the poorest of the country's provinces. The Chinese have authorized the beginnings of credit unions, known as rural credit cooperatives.
The Chinese government established a legal framework to allow for the existence of the cooperatives at the end of 2006, WOCCU said. On World Council's second visit to China, WOCCU CEO Pete Crear, along with Brian Branch, chief operating officer, and Ralph Swoboda, WOCCU's consultant on China, spent a week with government officials, RCC representatives and regulators from the People's Bank of China and the China Regulatory Banking Commission to begin planning RCC reform in the southwest Guizhou Province–one of the poorest and least developed in China, WOCCU said.
The Chinese government has identified RCCs as prime vehicles for providing affordable financial access to small-scale entrepreneurs and consumers, but RCCs have long struggled with an unclear ownership structure, poor governance and erratic financial performance. The group discussed WOCCU's potential to provide technical assistance and training to strengthen and reform the operations of the RCCs, WOCCU added.
“The baseline assessment revealed a need for staff training and development of best practices in governance and lending, as well as information technology upgrades,” explained Branch. “Within the next couple of months, we will conduct a more in-depth study to identify key technical needs and map a reform strategy for the RCCs in China.”
Branch and Swoboda will also lead a study group of 14 WOCCU Supporters and board members to China in June. During the trip, credit union CEOs from the United States and Canada will study the RCC system and provide initial training on model credit union building.
All-China Federation of Trade Unions, China's only national trade union federation and the largest trade union in the world, has also sought World Council's assistance in a separate initiative to form a credit union for its 134 million members, WOCCU said. ACFTU is a voluntary trade union that represents more than 1.7 million primary trade union organizations of China's working class. “The preliminary talks with ACFTU have been promising,” Crear noted. “And with nearly 150 million members, the formation of an ACFTU credit union would nearly double total affiliated credit union membership throughout the world.” –[email protected]
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