Europe’s biggest bank, HSBC, has opened a wholly owned subsidiary in rural China the first foreign lender to do so.

Hubei Suizhou Cengdu HSBC Rural Bank, or more simply HSBC Rural Bank, will offer deposit services to local businesses and individuals and provide loans to agricultural companies.

Other foreign players including Citigroup and Standard Chartered Bank have also shown interest in the nation’s underdeveloped regions, encouraged by the government as it tries to reduce the growing income gap with cities.

With 22 staff and registered capital of RMB10 million, the HSBC subsidiary plans to provide loans to individual farmers next year.

Vincent Cheng, HSBC’s chairman said at the opening, ‘We are extremely pleased to be the first international bank to enter the country’s rural market. There is tremendous promise for economic development in the rural areas. We believe that HSBC’s global network and expertise will help unlock new opportunities for China’s rural population as well as for the bank’s business in this fast-growing, but still largely untapped market.’

Covering an area of about 6,900 sq km, the county-level district of Cengdu in central China has a population of two million and largely relies on export-oriented agriculture.

There has been increased enthusiasm for foreign-funded banks in China’s rural market since banking authorities lifted restrictions in October, approving villages and townships for a pilot scheme.

HSBC has also sent experts to Kaixian County in Chongqing Municipality and plans to open another village bank there, according to the county government.
Source: China.com