Financial Services Reform in Rural Areas! Two Departments Release Latest Document

To improve the rural financial services system, enhance financial resource allocation efficiency, and promote comprehensive revitalization of rural areas, the China People's Bank and the Ministry of Agriculture and Rural Affairs jointly issued the "Opinions on Strengthening Financial Services in Rural Areas" (hereinafter referred to as the "Opinions") on July 24.

Finance is the "source of life" for real economy and an important support for rural revitalization. In recent years, the central bank has continued to optimize resource allocation, with financial resources being channeled more quickly towards agriculture-related fields. As of March 31, 2024, outstanding agricultural loans reached 52.9 trillion yuan, a year-on-year increase of 8.4%.

The "Opinions" emphasize that financial resources will be increased in key areas for rural revitalization, including increasing credit resources to grain-producing regions and major counties, supporting the expansion of farmers' income channels, and so on.

To strengthen policy safeguards, the "Opinions" propose that monetary and credit policies will be comprehensively applied to encourage financial institutions to issue special bonds for rural revitalization, support eligible enterprises in issuing rural revitalization bonds, and increase funding injections into rural revitalization areas.

The central bank will strengthen coordination with other departments to focus on serving rural reform, using reform methods to improve financial services for agriculture, and timely summarizing typical experiences and innovative practices in financial services for rural revitalization. It will also enhance statistical monitoring and assessment, innovate rural revitalization investment mechanisms, and promote agricultural efficiency, rural vitality, and farmers' income.

Increase Credit Resources to Grain-Producing Regions

The "Opinions" propose that financial resources will be increased in key areas for rural revitalization. Specifically:

One is to enhance grain security financial guarantees, increase credit resources to grain-producing regions and major counties, deepen high-standard agricultural production, and strengthen new-type agricultural productivity development financial services.

Two is to continue consolidating and expanding the achievements of financial support policies, maintaining a steady pace in providing loans to poverty-stricken areas. Continue improving spot assistance quality, optimizing the linkage between banks and farmers, and actively planning post-transitional financial support mechanisms.

Three is to deepen rural rich-poor industry financial services, widening collateral-based financing channels, innovating rural "special products" financing modes and exclusive financial products. Promote the "one-chain-one-strategy" financial service model, enriching bond, wealth management, and other financial product supplies, supporting farmers' income expansion.

Four is to improve rural construction financial services levels by providing multi-faceted financing schemes through project bundling, establishing silver teams, and so on. Provide comprehensive financial services, including bond financing, equity investment, trust, and leasing, supporting county-level urban-rural integration development and new-type urbanization construction.

Five is to strengthen financial empowerment for rural governance quality, enhancing the depth of "agriculture-culture-tourism" financial services, using credit market service platforms to empower digital rural development. Deeply push forward the construction of rural credit system, improving rural basic financial services levels.

Support Eligible Enterprises in Issuing Rural Revitalization Bonds

This round of "Opinions" emphasizes that a sound financial service system for rural reform should be established, encouraging localities to explore and establish agricultural infrastructure and livestock trust registration systems. Expand the scope of collateral-based financing, promote the circulation of rural resources assets.

The "Opinions" also propose that policy safeguards will be strengthened, and comprehensive monetary and credit policies will be applied to encourage financial institutions to issue special bonds for rural revitalization, support eligible enterprises in issuing rural revitalization bonds, and increase funding injections into rural revitalization areas. Strengthen risk compensation, loan subsidies, and reward mechanisms to promote government-backed guarantees, supporting various agricultural operators.

Implementing the rural revitalization strategy requires solving the question of where funds come from. This year's central document for the first time proposed "encouraging eligible enterprises to issue rural revitalization bonds". According to a survey by Dazhong Daily, since 2018, rural revitalization government bonds have been issued 699 times, with a cumulative issuance scale of 50.25 trillion yuan as of February 28, 2025.

"Issuing rural revitalization bonds is an important manifestation of innovative rural revitalization investment mechanisms," said Wang Xiaoya, academic member of the China Rural Research Institute at Tsinghua University, in a recent article. In recent years, rural revitalization bond issuance has accelerated, product varieties have enriched, and service efficiency has improved.

To accelerate the issuance and use of rural revitalization bonds, further enrich and improve rural revitalization investment mechanisms, it is recommended to speed up the improvement of issuance and trading rules, increase policy support intensity, and establish a rural revitalization bond assessment mechanism.