With 7.4 million yuan (US$893,720) from both the reemployment fund of the Tianjin municipal government and some international financial aid, the federation established a micro-credit fund for laid-off women workers, especially for those with continuing labor ability but leading a very difficult life. The key purpose was to solve the practical difficulty facing these women -- lack of capital to open up their own business. Only the retrenched women, couples and single mothers whose family income is only half of the average amount of the city, or whose family’s overall property doesn’t go beyond 10,000 yuan (US$1207.72) are eligible for applying the micro-credit. In terms of the loan-giving mode, there is no need for recipients to offer a mortgage and guarantee; at the same time, the small-group loan has become a common practice so as to decrease the risks that might be involved in this loan system. The amount ranges from 4,000 (US$483.1) to 6,000 yuan (US$724.6), with a term of one year.

Since the micro-credit scheme took effect, many laid-off women workers have built up their confidence to open their own enterprises. Up to now, some 1,200 households have benefited, and the payback rate has been 99.8 percent. The industries involved cover business & trade, catering, manufacturing & processing trade, service industry. According to a survey among 302 households who have fulfilled their one-year term for loans, about 14 percent achieved a monthly income increase of 800 yuan (US$96.6), with 45 percent achieving 500-800 yuan (US$60.4-96.6), and 35 percent fulfilling 500 yuan (US$60.4). Only one percent of the families saw no increase in income, while five percent failed. In addition to helping 1,000 families, the scheme has also created 400 jobs for other laid-off workers.

The personnel responsible for carrying out the micro-credit scheme provide laid-off women workers with psychological consultation, policy guidance, specific training in management and basic legal knowledge. They also offer great help for the women to go through the complicated procedures for license registration, to find a place to open their own business and also reduce their tax payments. They also help with many other practical difficulties through routine household inquiries and the organization of loan recipient group meetings. Meanwhile, a personal credit system for laid-off women workers has also been established, and the training has helped many recipients to develop strong personal credit ratings for further expansion. A prime example is Wang Rong, a laid-off worker who benefited a lot from the micro-credit system. With her good credit record, via the coordination with Tianjin Women’s Federation, she got another loan of 90,000 yuan (US$10,869.57) from a local commercial bank to open her own garment company.

Today, most of the micro-credit programs sponsored by the United Nations are oriented towards rural areas. As the first successful trial to promote this program into cities, Tianjin has set a good example. According to Wang Zhiqiu, chairman of Tianjin Women’s Federation, this mode is worthy of governmental further study, evaluation and promotion. If the government’s capital reserved for reemployment can be well employed according to this mode, then, more benefits can be achieved in the future, she said.

(china.org.cn July 8, 2002)