ENP Newswire -
Release date- 28082014 - PBC Increases Agro-Supporting Central Bank Lending Quota to Reduce Financing Cost of Agricultural Sector, Rural Areas and Farmers.
In order to implement the decision adopted at the Executive Meeting of the
First of all, the management of agro-supporting central bank loans will be enhanced. During the duration of an agro-supporting central bank loan, the amount of new agro-loans of the recipient rural financial institution shall be no smaller than the agro-supporting central bank loan it has borrowed. Secondly, there will be measures to guide rural financial institutions to lower interest rates of agro-loans. The agro-supporting central bank loans will be provided with concessional interest rates. Qualified rural financial institutions in the poverty-stricken areas will enjoy a further reduction of 1 percentage point from the concessional interest rates when borrowing agro-supporting loans from the central bank. Therefore, the agro-loans extended by a rural financial institution using agro-supporting central bank loans it has received should be lower than the weighted average interest rate of agro-loans of the same maturity extended by the financial institution. Thirdly, the efficiency of agro-supporting central bank lending will be improved. The central bank will make good use of the new agro-supporting loans and revitalize the stock of agro-supporting assets to optimize the regional structure of the quota of agro-supporting central bank loans. Fourthly, there will enhanced monitoring and evaluation on how the agro-supporting central bank lending has helped reduce the financing cost of the agricultural sector, rural areas, and farmers. Monitoring and scrutiny of the ultimate recipients of the agro-supporting central bank loans and interest rates of agro-loans will be enhanced to make sure that the agro-supporting central bank lending serves to reduce the financing cost of the agricultural sector, rural areas and farmers.
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