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ABC: Green finance serves agriculture, rural areas and farmers

2019-01-03Sino-Swedish CSR Websiteadmin0010

 

Company profile
 
Established in 1951, the Agricultural Cooperative Bank eventually became the Agricultural Bank of China (ABC). The Bank was restructured into a joint stock limited liability company in January 2009. In July 2010, the Bank was listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange. The Bank focuses on four central themes: “Sannong(agriculture, rural areas and farmers)” banking services for both urban and rural areas, maximizing shareholders returns, and assisting staff development”. ABC is committed to building an international commercial banking group with professional operations, efficient and convenient services, diversified functions, as well as demonstrated value-creation capability. In 2017, the Bank ranked No. 38 in Fortune’s Global 500, and ranked No. 6 in The Banker’s “Top 1000 World Banks” list in terms of tier 1 capital. 
 
Challenge
 
In recent years, the tightening agricultural resources, increasing rural non-point source pollution, and degraded agricultural ecosystems have constrained the sustainable development of agriculture. In September 2015, the Overall Plan for the System Reform of Ecological Progress issued by the Central Committee of the Communist Party of China and the State Council first proposed “to establish a green financial system in China”. General Secretary Xi Jinping at the 37th meeting of the Central Committee for Comprehensively Deepening the Reform Leadership Group clearly pointed out that promoting green development of agriculture is a profound revolution in the agricultural development view and the main direction of the agricultural supply-side structural reform. With the gradual growth of rural financial markets, more and more financial institutions are involved, and the structural risks and overall operational pressures of various financial institutions are becoming increasingly prominent.
 
Solutions
 
For more than 60 years, the ABC has always practiced the historical mission and political responsibility of serving the "Sannong issues" and regarded the "Sannong" financial services as the eternal theme of its own development and reform. Implementing the requirements of green development of agriculture, vigorously promoting the development of green finance business, and strengthening the construction of green financial system and mechanism are not only the responsibility of ABC as a state-owned bank, but also an important background for the supply-side structural reform of agriculture.
 
Establishing a “Huinong e-Tong” platform to actively promote green services
 
Based on the rich experience of “Sannong” management and management, in 2017, ABC started the “Sannong” and “No. 1 Project” to use mobile internet, big data, blockchain and other technologies to build “Huongong e-Tong” unified service platform and create a new model of online and offline integration of “Sannong” financial services. 
 
The “Huinong e- Tong” platform includes “Huonong e-loans”, “Huonong e-payment” and “Huonong e- merchants”. Among them, “Huonong e-loans” expands the loans of farmers in batches, effectively reduces costs, solves the problem of farmers' financing, and provides economic support for the prosperity of the industry; “Huonong e-payment” integrates rural basic financial services into the production and life scenes of farmers, effectively reducing “Sannong” service cost and rich trading channels; “Huonong e- merchants” builds a service system that closely integrates e-commerce and finance for all kinds of users on the agricultural production and supply chain, and improves the advanced, adaptable and flexible agricultural supply structure, thus promoting agricultural efficiency and increasing farmers' income. 
 
Developing green credit to fully support green agriculture
 
The ABC actively supports the agricultural infrastructure construction, agricultural technological innovation, agricultural restructuring, and agricultural rural non-point source pollution control. In 2017, ABC formulated the Guiding Opinions on Vigorously Developing the Green Finance Business of “Sannong Issues”, and clarified eight key areas of green financial services (comprehensive improvement of rural environment, agricultural non-point source pollution control, agricultural land remediation and restoration, and ecological recycling agriculture development, high-efficient water-saving irrigation, development and utilization of green resources, green upgrading of county-level industry, development of county-level energy-saving and environmental protection industry) to jointly promote financial support for green development of agriculture together with  the Notice on Promoting Financial Support for Agricultural Green Development issued by the Ministry of Agriculture.
 
The ABC requires all branches to cooperate in eight key areas and fully support a number of major projects. The Zhejiang Branch built a diversified and multi-level financial supply system around the supply-side structural reform of agriculture.
 
Innovative products such as “Country Tourism Loan” and “Homestay Loan” have formed a number of high-quality farmhouses with scale and reputation; tailor-made products such as “Technology Loan” and “JiaKetong” support the development of exhibition agriculture and smart agriculture, effectively cultivating the emerging industries of agriculture and promoting the transformation and upgrading of agriculture.
 
Innovative urbanized loan products are developed to build green rural agribusiness. The innovative products such as “small urban environment comprehensive rectification loan”, “beautiful and livable urban and rural loans” and “beautiful rural construction loans” are launched. Starting from livable environment, infrastructure and public services, ABC promotes the construction of a new village with  better layout by scientific planning, clean and beautiful environment, good life and entrepreneurial income, and a better rural civilization.
 
Achievement
 
Social benefit
 
As of the end of 2017, the balance of “Huinong e-loans” of ABC reached 15.2 billion yuan, covering 150,000 rural households; the use of “Huongong e-Payment” and the payment products were further enriched, and the number of Huinongtong service points with Internet upgrades reached 250,000. The “Huinong e-merchants” has more than 1.5 million merchants on line, and the transaction amount has reached more than 250 billion yuan.
 
Environmental benefits
 
In terms of green credit, ABC has improved its green policy system and guided funds to actively invest in green agriculture, clean energy, green transportation, and regional pollution prevention and control. As of the end of 2017, the balance of green loans of ABC was 747.6 billion yuan, an increase of 98.2 billion yuan over the previous year; the energy conservation and environmental protection projects supported by the company could save 21.85 million tons of standard coal and 47.8 million tons of carbon dioxide equivalent per year.
 
Economic benefit
 
As of the end of 2017, the balance of ABC's county-level loans was 3.57 trillion yuan, an increase of 390 billion yuan from the beginning of the year, a growth rate of 12.3%, which was 2 percentage points higher than the average level in banking; the balance of agriculture-related loans was 3.08 trillion yuan, an increase of 358.6 billion yuan from the beginning of the year, an increase of 141.4 billion yuan year on year.
 
Prospect
 
In the future, ABC will further promote the development of green finance for “Sannong” in the following six aspects: improving the service system, deepening multi-party cooperation, giving play to the group's synthetic role, increasing policy support and resource support, strengthening risk prevention and control measures, and promoting publicity.
 
 
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