Summary of Proposed Investment
Project Number
27574
Company Name
BAYAN RONGXING VILLAGE & TOWNSHIP BANK CO.LTD
Date SPI Disclosed
May 5, 2009
Country
China
Industry
Financial Markets
Projected Board Date
Jun 5, 2009
Status
Completed
Sector
Commercial Banking - Microfinance and Small Business
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Jun 24, 2009
Signed : Jun 30, 2009
Invested : Dec 28, 2012
Project Description
China’s policy objectives in the context of the global financial crisis are focused on its transformation from an export-driven economy to one led by domestic consumption, while achieving environmental and social sustainability. In order to increase domestic demand, China needs to significantly reduce the gap between living standards in urban and frontier/rural areas. Microfinance is one of the tools to narrow that gap and to provide, amongst other benefits, employment opportunities to factory works who may have lost their jobs in export-oriented companies located in the coastal area and who are migrating back to China’s rural areas.
The proposed project consists of equity investments of up to US$10 million in a network of 5 - 10 greenfield Village and Township Banks (“VTB”) in China which are sponsored by Harbin Bank (the”Bank”). The Bank as the leading sponsor will contribute most capital and resources to the network of VTBs. It will take an equity stake of more than 51% in each VTB and nominate the key management team. IFC will take a 10 - 20% equity stake in these VTBs and will provide technical assistance.
A VTB is effectively a deposit-taking microfinance bank, a model initiated by CBRC (the Chinese banking regulator) in 2006. As the VTB concept is still in the pilot stage, CBRC gives a limited number of licenses to sponsoring banks which are required to take the lead in setting up VTBs in a designated county or township, and the operational scope of a VTB is clearly limited to one county or township. The sponsoring banks could be local banks or qualified foreign banking institutions with an eligibility test as to consolidated balance sheet size reaching US$1.0 billion. The sponsoring bank must take no less than 20% equity in a VTB and any non-banking shareholder may hold equity of up to 10%.
The proposed project consists of equity investments of up to US$10 million in a network of 5 - 10 greenfield Village and Township Banks (“VTB”) in China which are sponsored by Harbin Bank (the”Bank”). The Bank as the leading sponsor will contribute most capital and resources to the network of VTBs. It will take an equity stake of more than 51% in each VTB and nominate the key management team. IFC will take a 10 - 20% equity stake in these VTBs and will provide technical assistance.
A VTB is effectively a deposit-taking microfinance bank, a model initiated by CBRC (the Chinese banking regulator) in 2006. As the VTB concept is still in the pilot stage, CBRC gives a limited number of licenses to sponsoring banks which are required to take the lead in setting up VTBs in a designated county or township, and the operational scope of a VTB is clearly limited to one county or township. The sponsoring banks could be local banks or qualified foreign banking institutions with an eligibility test as to consolidated balance sheet size reaching US$1.0 billion. The sponsoring bank must take no less than 20% equity in a VTB and any non-banking shareholder may hold equity of up to 10%.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Ms. Sun Feixia, Director of Board Office
Harbin Bank
160 Shangzhi Street, Daoli District,
Harbin, 150010, Heilongjiang
Telephone: (0451)86779899
Fax: (0451)86779000
Harbin Bank
160 Shangzhi Street, Daoli District,
Harbin, 150010, Heilongjiang
Telephone: (0451)86779899
Fax: (0451)86779000
For Inquiries and Comments About IFC, Contact
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster