The China Banking Regulatory Commission (CBRC) announced on Friday that it would extend its pilot project of rural financial institutions to all the country's regions, in a move to improve financial services in rural areas.

Only six provinces were included in the original pilot program to allow foreign and domestic banking capital to invest in, or to purchase or establish, banking institutions in rural areas.

So far, 23 rural financial institutions in these areas have been granted approval to open business, including 11 village banks, four rural loan organizations and eight rural cooperative fund associations.

Chinese farmers and rural enterprises currently have few places to access funds for their businesses. Official figures show Chinese farmers rarely obtain loans of more than 5,000 yuan.

After the government lowered the working capital limits for domestic financial institutions to establish branches in rural areas to three million yuan for banks in counties and one million yuan in villages and towns in terms of registered capital, a couple of village banks were established in pilot areas this year.

HSBC got the green light from the CBRC to set up a village bank in Hubei Province, becoming the first foreign bank to set foot into the nation's vast rural financial market. (US$1 equals 7.5114 yuan.)

(Xinhua News Agency October 13, 2007)