What Is a Financial Cooperative?

Rural Credit Cooperatives (English name: Rural Credit Cooperatives, Chinese abbreviated as Rural Credit Cooperatives, Rural Credit Cooperatives) refers to rural cooperative financial institutions established with the approval of the People's Bank of China, consisting of members' shares, implementing democratic management, and mainly providing financial services to members.

Rural Credit Cooperatives

Rural Credit Cooperatives (English name: Rural Credit Cooperatives)

As early as the 1950s, the PBC's rural outlets were changed to rural credit cooperatives. The purpose of rural credit cooperatives is "farmers help each other in capital", that is, farmers form credit cooperatives, members contribute money to form capital, and members can use the money to make loans.

However, this credit cooperative was never formed voluntarily by the farmers, but was run by the government. In the original credit cooperatives, most of the funding came from the state, and farmers contributed only a small part. Although the credit union system has been changed for more than 50 years, I do not know how many times, but the "government-run" system has always been consistent. Around 2004, the central bank and local governments paid a large amount of funds (the central bank took 165 billion) to pay for the shortfall of credit unions. Therefore, the property right of a credit cooperative is not vague, and its owner is the government.

The relationship between the county federation and a single credit union is equivalent to the head office and the

Rural credit cooperatives, as banking financial institutions, have their own characteristics, which are mainly reflected in:

1. Farmers and other individuals in the rural areas are jointly funded. A cooperative financial organization whose main purpose is mutual assistance. Its business operation is managed and operated by members designated by members based on democratic elections.

Its highest authority is the member congress, and the executive body responsible for the management of specific affairs and business operations is the council.

2. The main sources of funds are the share capital paid by members of the cooperative, retained public reserve funds and absorbed deposits; loans are mainly used to meet the capital needs of its members. At first, short-term production and living loans and consumer loans were mainly issued. Later, with the development of the economy, the loan channels were gradually widened, which is no different from commercial bank loans.

3. Since the business objects are members of cooperatives, the business procedures are simple and flexible.

Legal interest rates: Various interest rates approved by the State Council and authorized by the State Council to be statutory interest rates. The announcement and implementation of statutory interest rates are the responsibility of the head office of the People's Bank of China.

Base interest rate:

A borrower applying for a loan should have the basic conditions of a marketable product, efficient production and operation, no misappropriation of credit funds, and abiding by credit, and must meet the following requirements:

1. Conditions for corporate loans and their borrowers:

(1) The borrower is a member of the stock loan leading society, and has opened a deposit account with the society

(2) The purpose of the loan is in accordance with the national industrial policy, production and operation are normal, business performance is good, and the ability to repay the principal and interest of the loan on schedule

(3) Good credit and no bad loan history

(4) able to provide effective guarantees or movable (real), real, equity (pledge) mortgages

(5) Other conditions stipulated by the lender

2. The main contents of the loan review committee's review of loans:

(1) Whether the loan is legal and compliant, and whether it conforms to the national industrial policy and credit policy

(2) Pricing of loans and their comprehensive benefits

(3) Risks and precautions for loans

(4) Other contents to be considered according to the loan project