The Chonqqing branch of Agricultural Bank of China, one of the China’s five state-owned banks, earlier this month became the latest branch of the bank to launch a debit card targeting local farmers.
With the card, called Hui Nong, farmers may apply for small loans up to 50,000 yuan (US$7,314 or 5,375 euros), an Agricultural Bank representative tells PaymentsSource.
The issuer will put funds from approved loans into subaccounts tied to the cards. Cardholders must go to the branch to transfer the loan funds to the main account to access the money, the representative says.
Though the annual interest rate, at 5.4%, is the same as commercial loans, the farmers still benefit. “If the cardholder didn’t use up the loan and wants to repay the loan early, the interest would be recalculated by the exact amount and the days, and he will not have to pay the penalty,” she says.
As China’s only debit card designed for the country’s more than 900 million farmers, Hui Nong card first was launched in mid-2008 for a trial in eight selected provinces. During the past two years, Agricultural Bank has been expanding the program in accordance with the central government’s policy to boost the rural economy. Besides Chongqing, the bank’s other local branches offering the card include those in the provinces of Guangzhou, Shanxi and Hubei.