IFC Private Enterprise Partnership China (IFC PEP China)

Objectives: This International Finance Corporation Private Enterprise Partnership China (IFC PEP China) project aims to support the development of private, small and medium size enterprises in the interior region of China, with initial focus on Sichuan province. Three principal objectives are proposed based on GOC needs and priorities and IFC's comparative advantage: 1) Bridge the growing gaps between rural and urban and between interior and coastal areas by promoting reform in less-developed and remote areas; 2) Reduce poverty and enhance stability by stimulating job creation in the small and medium enterprises through improved access to finance; 3) Promote the adoption of better environmental, social, and governance practices by the emerging private sector in China to enhance the long-term sustainability and poverty impact of growth.

Australian Contribution: A$3.65 million

Co-financers: IFC, Switzerland, United Kingdom

Duration: 2006-2011 (CPDF Phase I: 2001-2006)

Location: Primarily Sichuan, small-scale expansion to Xinjiang, Shaanxi, Yunnan and Gansu planned. National level legal reform.

Project Components: (a)access to finance, (b) sustainable business advisory, and (c) investment climate.

Component 1—access to finance: The access to finance program targets key policy reforms as well as the development and transfer of commercially viable business models that support access to finance for the under-banked. The program seeks to leave behind financial infrastructure, capable institutions, and competent professionals. The results such as a property law, credit reporting system and the security interest registry will remain in the economy over the long-term.

Component 2—sustainable business advisory: The sustainable business advisory program has been focusing on promoting traceability and quality management systems along client company's supply chains. The program seeks to build higher safety and quality standards with lead firms, and then replicate the standard to farmers by development of more commercially viable business models. Through implementation, introduction of higher standards, capacity building for lead firms’ internal staff, and training and coaching for individual farmers are key areas that will contribute to sustainability of the business model across industries in the long-term.

Component 3—investment climate: The Industry Transfer Center, opened in Shanghai as part of the project to support investment in central and western provinces, is fully staffed and funded by the Government of China. The reforms tested in the client city of Yinchuan have been institutionalised within a reformed Municipal Investment Promotion Bureau. The establishment and reform of these institutions represents system impact and a high level of project sustainability.

Achievements to date:

The project helped to establish an Account Receivable Registry that facilitated more than 240,000 loans to date. IFC’s work has unlocked more than US$684 billion in capital for small and medium size enterprises.
Through the project’s assistance, a comprehensive national credit bureau is now operational and provides the world’s single largest repository of individual credit/financial data. It facilitated more than $670 billion worth of financing for about 220 million borrowers.
The Business Edge Management Training Program trained 560 local trainers who provided 79 courses to about 50,000 managers of small and mid-sized enterprises in Sichuan and other Chinese cities. Participants’ satisfaction was exceptionally high and the training content has been widely used.
The project assisted five lenders to small and mid-sized entrepreneurs (mostly operating in western and frontier regions) at the end of June 2010, helping to boost their lending by 14,000 loans to a total of more than 38,000 outstanding loans valued at $5.9 billion.
The project’s agribusiness linkages projects have directly benefited about 24,000 farmer households in three provinces (Sichuan, Yunnan and Guangxi), improving the livelihoods of about 72,000 rural people.

Managing contractor/team leader:

Ms Xiao Weilan
Office Manager
IFC PEP-China International Finance Corporation
Suite 2716, CCB Sichuan Building
No. 88, Ti Du Street, Chengdu
Sichuan Province, China 610016
Tel: +86-(0)28-65522822
Fax: +86-(0)28-8676 7362
Email: wxiao@ifc.org
Website: www.ifc.org/pepchina

Chinese counterparts: National Development and Reform Commission, Ministry of Finance, Ministry of Commerce, People's Bank of China, and Sichuan Investment Promotion Board

AusAID contact:

Yu Li
Program Officer
No 21, Dong Zhi Men Wai Dajie, Beijing, PRC
Tel: +86-10 5140 4412
Fax: +86-10 5140 4199
E-mail: li.yu@dfat.gov.au

May 2008