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[BEIJING] China urged its banks to speed up lending to agriculture, the country's banking regulator said on Tuesday, in an effort to bolster a sector that employs almost one third of its 1.4 billion people, but remains in desperate need of funding.
Policymakers have cut interest rates, increased lending targets and freed up banks' reserves to lend more, but this has done little for farming, which produces some 9 per cent of China's GDP, though with low productivity.
Inefficient and obsolete farming techniques have been blamed for causing major soil and water pollution and food scandals, and economists say the sector needs investment from banks that have so far been reluctant to lend, despite repeated demands from Beijing.
Banks should "persist in improving rural finance services and forcefully support agriculture modernisation," a statement posted on the website of the China Banking Regulatory Commission (CBRC) said.
Financial institutions should also "strive to achieve rural lending speeds that exceed the average level of all loans," the regulator said, adding that water conservation and rural road construction would be a priority.
China's "number one" planning document, issued by state media in February, listed modernising farms as a key priority for 2015, including plans to encourage private investment and cheaper financing.
China has been struggling to squeeze as much food out of its declining land area as possible as demand increases from ever-expanding urban regions.