PSBC Microfinance and Retail Banking
Context
The Postal Savings Bank of China (PSBC) was established in 2007, becoming China’s fifth largest bank after the Chinese “Big Four”. PSBC, formerly known as the Savings and Remittance Bureau of China Post, was separated from China Post and granted a full banking license in 2006. It counts more than 270 million clients, approximately half of which are poor households. The institution has mobilized deposits amounting to over 160 billion Euros, which is equivalent to approximately 10% of all savings mobilized from households in China. It is the largest financial network linking the urban and rural areas in China, with two thirds of its 36.000 branches located in semi -urban or rural areas. This makes it the only bank with country-wide operations commanding such an extensive branch network in remote rural areas. PSBC is thus an important part of the rural financial system.
Along with its establishment as a fully fledged bank, the PSBC is extending its offer of financial services by developing and implementing lending products. In the past, Postal Savings was limited to deposit and remittance services, which resulted in a vast outflow of rural capital. Through the introduction of lending products, designed for different target groups, including rural households and Micro and Small Enterprises, the bank will be able to redirect capital to rural areas, where supply of lending products is scarce.
Objective
The transformation of PSBC towards a sound and professional financial intermediary for both urban and rural areas significantly contributes to the stability of the overall Chinese financial sector. Furthermore, it enables the rural population to better benefit from the economic growth dynamics in China.
Approach
The project supports the development and implementation of new microfinance and retail banking products in PSBC pilot-branches in the provinces of Shandong, Zhejiang and in the City of Beijing. On-site technical assistance will be provided in these pilot branches to ensure state-of-the-art lending procedures. After the piloting phase the joint PSBC GTZ team will accompany the roll-out to PSBC branches in other provinces.
In order to ensure smooth and effective product development, piloting and roll-out, the joint project will focus on fields related to the credit business such as organizational development, HR development, liquidity and risk management, IT and accounting. In addition to on-site TA, training sessions, workshops and exposure trips to international best practice examples in microfinance and retail banking will be organized.