OREANDA-NEWS. August 06, 2014. In recent years, ICBC has actively supported China’s agricultural modernization by closely following the government’s agricultural development policies and market demands, and providing innovative services aimed at market leaders, full industry chain, new forms of guarantee, and successful product promotion.

As at the end of May 2014, the balance of loans granted by the Bank to agriculture and related sectors amounted to RMB 1.88 trillion, accounting for around 20% of total outstanding loans of its domestic branches.

According to an official with ICBC, given the diversity of ownership, regional development and financial needs of China’s agricultural sector, and varied trading rules on the property rights of land, forestry, fishery and other assets, the Bank has launched innovative products and services based on the features of different regions and owners.

First, ICBC has provided support for leading enterprises to grow stronger and more competitive. By seizing the opportunities during the transformation of traditional agriculture towards industrialization, mechanization, and upgrading of the industry chain, ICBC has been fully committed to meet the financial needs of leading players in the agricultural sector.

Second, the Bank has focused on the entire industry chain and actively developed industry chain financing. As leading enterprises in the agricultural sector mostly have operations across the entire industry chain and a wide scope of business, ICBC has  addressed turnover issue for small and medium-sized enterprises (SMEs) and farmers in the upstream and downstream by means of factoring, payables financing and loans to individual businesses, based on the supply contracts or accounts receivables of these SMEs and farmers with the leading enterprises. For instance, by cooperating with CP Group in Henan, the Bank provided funding support to CP Group and over 2,000 pig raisers in the upstream and downstream of the industry chain, in the form of “bank + leading enterprise + farmers + guarantee company”. In Heze, Shandong province, the Bank provided funding of RMB 112 million to the peony deep-processing project of a local enterprise, Heze Yao and Shun Peony Biotechnology Co., Ltd., by means of “leading enterprise + farmers”, which helped scale up production of the enterprise and also benefit the whole rural area.

Third, the Bank has offered new forms of guarantee, such as pledge by warehouse receipts and forestry property mortgage. As cotton processing enterprises are usually asset-lite and lack valid collaterals, ICBC Beijing Branch has worked with China National Cotton Exchange to launch loans pledged by warehouse receipts. Traders can obtain loans by pledging the commodity cotton stored at designated warehouses to the Bank, which has not only solved the financing difficulty, but also lowered financing costs for businesses. In light of the abundant local forest resources, ICBC Yunnan Branch has rolled out forestry property mortgaged loans, and turned the “sleeping” resources into mortgage-backed assets.

Fourth, ICBC has actively promoted agricultural products and online sales. By leveraging its eBuy platform (mall.icbc.com.cn), ICBC has integrated customers and merchants, payment and financing, the logistics, capital flow and information flow to promote agricultural products with superb quality and favorable prices. For example, the Bank’s eBuy has put on shelf 42 types of vermicelli produced by Henan Xiangnian Foods, and expedited the sales of the company’s products.