Rural Credit Cooperatives

Rural Credit Cooperatives (Chinese: 农村信用合作社) or (simplified Chinese: 农村信用社; traditional Chinese: 農村信用社; pinyin: nóngcūn xìnyòngshè) is a People's Bank of China sanctioned cooperative or credit union of providing credit in the rural areas of the People's Republic of China.

In The 1950s, a network of rural credit cooperatives was created. At this time, they were not commercial enterprises similar to banks, but rather channeled credit between the state and the people's communes in rural areas.

In the late 1970s, after economic reforms enabled some individual entrepreneurialism and the creation of collective enterprises, the RCCs began to function as grassroots banks that provided credit and savings accounts to families and collective enterprises. In the reform era, the RCCs were intended to serve as a means for the Agricultural Bank of China to funnel credit into rural areas. However, the RCCs were insufficient to meet the high demand for credit in these areas.

Individual and enterprises often turn to other sources of credit, which range from Rotating Savings and Credit Associations to pawn shops. However, these other forms are all illegal (although some are tolerated to a greater degree than others, and are tolerated in some locations more than in others). Commercial banks are legal, but since fewer than one percent of loans from state banks go to private entrepreneurs, they do not meet the credit needs of rural areas.

...
Wikipedia