It's "pickle bank" that has turned the fortunes of many micro and small pickle makers in China's Sichuan province, and that too without having them to fulfill seemingly "impossible" conditions.
The bank, a branch of the Leshan Commercial Bank, was established last August in Meishan, a major pickle production base in the province. It now offers loans to micro and small pickle enterprises that otherwise would have faced trouble getting bank loans, Xinhua reported.
"Lack of fixed assets as collateral makes it hard for the micro-and small enterprises (MSEs) to get bank loans," said Wen Weihu, an official with the Sichuan provincial Banking Regulatory Bureau. To limit bad loans' risk, this "pickle bank" takes the Meishan Food Association's help in evaluating the credit worthiness of MSEs.
The association ensures that the firms related to the pickle industry do meet official production standards to operate legally. "We know each local pickle producer very well, such as their business structure, credit history and cash flow. Thus, we give credit guarantees to those with good business prospects," said Liao Xinrong, the association's head.
Liao also said prospective borrowers must find other MSEs to share the loan. In this way, the risk becomes manageable even without collateral. According to the pickle bank's head, it has lent a total of 60 million yuan to 28 pickle MSEs over the last few months but no bad loans have been reported so far.
"Our bank also has cooperation with the local fruit association, vegetable cooperative and even peasants. In addition to offering loans, we have also revamped the entire pickle production chain," said Gou Limei, the pickle bank's chief. Today the Sichuan pickles are exported to over 20 countries and regions, including the US, Canada and Japan.
According to government statistics, Meishan last year produced over one million tonnes of pickles, valued at over 6 billion yuan (about $952 million).