Seminar on informal financing held in Pingyao

A seminar about Shanxi merchants’ culture and informal finance was held recently in Pingyao county.

Co-hosted by the Shanxi Micro Loan Company Association and China Microfinance Institutions Association, the seminar aimed to promote the development of micro loan companies and to improve their management.

Representatives from finance offices of local governments, micro loan associations and loan companies across China attended.

The development of informal banks and daily management and risk controls were discussed, along with the culture of Shanxi merchants developing exchange shops, the development of informal financing in China and related legal cases, as well as opportunities and challenges for the micro loan business in China.

Pingyao county, known as the birthplace of China’s first micro loan company, has four companies that offer the loans to farmers, individually owned business and small- and micro-enterprises, and so far, 3.1 billion yuan ($33.69 million) in loans have been issued, boosting the economic development of the county.

Shanxi merchants, one of the most successful and powerful merchants groups in China, was active during the dynasties of Ming and Qing. One of the industries they are adept at is draft banking. They believed in credibility, integrity and solidarity, and founded China’s first exchange shop, Rishengchang, a financial institution that engaged in the exchange business, deposits and loans.