The 2005 Working Summarization Report of the Association for Rural Development of Yilong County

The 2005 Working Summarization Report of the Association for Rural Development of Yilong County

In recent years, with the help of SMAP program and the solid endeavor the entire staffs unremittingly devoted, the Association for rural development of Yilong County has revived from its Nirvana. In 2005, ARDY aimed at the organization’s characteristic that combined with commonweal and commerce, freed the thoughts, innovated its mechanism, seek audaciously, in the fields like microfinance for poverty alleviation, help and promotion to the construction of the rural mutual-assistance organization, external intercommunion and cooperation, and the construction of internal capacity and so on, ARDY has started developing again and achieved felicitous successes, and realized its rudimentary transformation that we could greet the spring of our developments.

Ⅰ、The huge vigor and force brought by the conversion of the microfinance mechanism

(1) The traditional microfinance business developed steadily

Since Sep. 2004, aimed at the characteristic of organization combined with commonweal and commerce, and based on the accomplishment of internal organization system in recent years, ARDY has consolidated the management structure through the reforms, applied the competitive employment and incentive mechanism, perfected the operation procedures of the microfinance and established the internal quality control management system according to the international system, with the innovated mechanism functioned effectively, each sub-association and organization in town- or village-ship have presented an excellent situation that all staffs responsibly and proactively devoted themselves to make the jobs to good developments. And the microfinance business has developed steadily and healthily, for example: Since the new credit system started running for 1 year and 4 months, ARDY has developed 867 valid credit clients, provided loans total￥6,147,000, the amount of lending balance was ￥2,526,000, exposures amount was ￥39,000 and the risk rate was 1.6% as well, which meant the cumulative payment in arrears was only ￥23,000, arrear rate was only 0.9% and on the contrary the repayment rate reached 99.4%. In ARDY’s branches, the sub-associations of Biquan and Wupeng Town are all the best samples for risk control, and they totally achieved zero risk in credit business. The total income of interests that all the towns and villages completed was ￥247,000, and the retained profits were ￥47,000, that made the self-financing rate of ARDY achieve to 123.5%. Until the end of the year(2005), added the loans that collected from last decade since the microfinance project started, ARDY had 1695 credit clients totally, the credit balance was ￥4,551,300 which accounted for 76.7% of the total assets of the Association.

But ARDY is still in financial deficit because of the external contact and a series of management expenses charged by the Headquarters, the total payment of the whole year(2005) was ￥321,000 and the income accomplished was ￥245,000 as well, namely, the loss accounts were ￥85,000.

(2) The village-ship fund successfully functioned and the microfinance business developed to the marginal business.

Although our microfinance business achieved great achievements through the processes of improvement and search within last decade, we never radically solved some important problems of microfinance such as miscellaneous costs, tremendous difficulty to control risk and the inefficient assets because of the limitations of the budgets, varieties, policies and etc. Therefore, ARDY actively sought for the operation mode of the village-ship funds, in the end half of 2005, under the support of local government and the Poverty Alleviation Office of the Yilong County, we established the rural sub-association in Kunshan Village, and found the village-ship fund of ￥137,000, in which including the enrollment shares ￥53,500 of 86 households farmers, the government allotment ￥53,500, donated share ￥30,000. The using of this fund practiced the principles of “democratic, easy, micro-amount, short-term, highly effective and progressive”, the money raising, operation and daily management of the fund of sub-association were really open, fair and righteous self-management that under the monitor of the committees of the villagers and CPC as ARDY as well. Because of the mechanism innovations, in the less than half year since the Kunshan Village Fund started running, the members of the sub-Association lent and repaid the loans at the central meeting once 10 days, and we have provided various loans 39 items total of ￥74,900, received repayment of ￥17,700, the interest income reached ￥980.54. The farmers all proactively repaid the loans in schedule and strived for being a man of honor in the communities, despite their astonishing poverties, and all of this made the mature repayment rate of the Village Fund reached 100%.

The operation mode of the village-ship fund ARDY innovated, not only let the farmers gain the benefits that “make the idle fund profitable, grant emergent fund convenient”, but also achieved its end of “grow the seeds of communities’ currency, fruit the organization of the communities”, meanwhile, according to the protocol with village’s sub-association, ARDY will conditionally advance capital under the situation the village-ship fund short of principal. Now the capital of the sub-association’s fund has been used up, in 2006, they will request ARDY to advance the capital to meet with the demands of microfinance in the village. In the operation of near future, ARDY will overcome the difficulties of the single entity’s huge cost, risk control, low benefits and so on, through the wholesale business of the microfinance, thereby we will develop the marginal business and continually enlarge the service space of the microfinance.

（3） Actively sought the means to develop the industry-commercial fund in town-ship, promoted microfinance and the rural-finance to deeper development.

To meet with the needs of the rural finance development and to provide more service in rural communities, ARDY actively seeks the way to lead the microfinance to multiple and deep development. In Dec. 2005, under the permission from the People’s Bank of China, ARDY forwardly propagandized the industry-commercial fund mode in Fuxing Town to promote the establishment of the Fuxing Town Economic Mutual-assistance Association. The principal sources of the developing fund were the combination of the shares allotted by the Association and enrolled members and the deposit it absorbed, and according to size of invested capital we elected a board as the highest authority bureau of this fund, chose microfinance as its major business, took taking full advantage of mutual assistance and combination with the capital and regulating the demand and supply to joint development as its purpose, and step by step, we will forward this economic association to a small joint-stock bank.

Ⅱ、Set communities development as our own task, ARDY actively promoted the construction of the new-type farmers’ mutual assistance and cooperation organization.

ARDY realized the self continuous development of the NGO organization and did the best in microfinance business, meanwhile we stuck tightly to the tenet and principles of “poverty alleviation and trouble aid, improvement to the rural continuous development”, took the communities development as our own task, searched effectively this year to innovation and built a new mechanism of the mutual cooperation organization based on the farmers, and we also promoted the construction of the new-type farmers’ mutual cooperation organization and achieved great successes.

In Jul. 2005, under the personal instructions of Mr. Hongming Cao, the section chief of International Cooperation and Social Poverty Alleviation Department of the State Council Leading Group Office of Poverty Alleviation and Development, and the great promotion of Yilong County Government and Committee, with the cooperation and support of the County’s Office for Poverty Alleviation, ARDY took full advantage of the decennary experiences of international poverty alleviation, investigated in the community of Kunshan Village, organized the forums and propagandized the organization, jointly help and supported 116 households farmers of Kunshan Village to establish the village’s association for rural development, and built 3 centers and 18 teams divided by different districts, also found a village-ship fund of ￥137,000. Oct.22th 2005, the second village-ship association that ARDY helped to build, the Association of Jiuwan Village for Rural Development was established, and it developed 83 members, found a village-ship fund of ￥100,000, also constituted the methods for managing and protecting the fruit-trees and a series of bylaws of the Association.

Since ARDY supported to build two village-ship associations, we have trained their 6 managers more than 10 times on mutual cooperation organization, financial, credit and participation methods, and etc., and led them to Bazhong to visit the memorial of Dr. James Yen, the educationist of civilian education and the founder of rural rebuilding movement, made them accept the notions of rural rebuilding educations. Meanwhile, we organized and promoted the central meetings once 10 days, propagandized the Government’s policies for agricultural development, jointly discussed the developing programs、 production cooperation and the ways of self-service, we also discussed the concrete proposals on uniting the agricultural capital and the purchase and sale of the primary products, piloted members together to exchange the market information、 production and living experiences, frequently developed the technical training on the platform of the Organization, for example, the sub-association of Kunshan Village successively organized vegetables, cole crop cultivation training 6 times; rabbits, pigs, geese, chicken, duck breeding training 4 times and provided more than 70 times in-field professional guidance. With ARDY’s huge devotions of manpower, source and material, and the continuous guidance, monitor and support of one certain commissioner to the two sub-associations, this new-type farmers’ mutual cooperation organization attained great achievements, and we also won the high appraisement of the related department from the State Council Leading Group Office of Poverty Alleviation and Development to Province, City and County.

Ⅲ、Strengthened external intercommunion and cooperation, moreover enhanced the good reputation and international recognition of ARDY, the capacity construction of the mechanism also improved rapidly.

In 2005, ARDY continuously strengthened the external intercommunion and cooperation, enhanced more great reputation and international recognition, and meanwhile under the supports of the international organizations, the capacity construction of the mechanism improved rapidly.

For example:

1、ARDY participated all kinds of conferences on invitations, and through these intercommunions and propaganda, we spread the Association’s influence and recognition. This year (2005) we successively participated in many conferences and activities, such as “2005 The Symposium of NGOs in Sichuan Province” held by Conservation International, “International Symposium on Commonweal Enterprise and Harmonious Society” held by Tsinghua University, “Forum On Cooperation Between NGOs and Government” held by the Amity Foundation, “The Start-up Ceremony of the Poverty-Alleviation Programs at Village-ship Implemented by NGOs Cooperation With the Government, Together With the Public Bidding Meeting On NGOs” held by China Foundation For Poverty Alleviation, The Rural Construction Forum in Renmin University of China, “Forum and Photography Exhibition on Volunteers’ Activities and Community’s Development” held by Heifer International, “The Achievement Exhibition of China’s NGOs” held by Tsinghua University, and we enrolled in the Internet Promotion Association on China’s Microfinance Development, cooperated with www.npo.org.cn to update either relevant links, and so on. ARDY also attended “The Awarding Convention of the International Year of Micro-credit 2005 in China Region” held by Rural Development Institute, China Academy of Social Sciences and China International Center For Economic and Technical Exchanges, and Mr. Qirong Luo, one of the clients of Wupeng sub-association of ARDY, honorably won the First Prize of Micro-credit Year that awarded by UNDP.

2、We zealously welcomed the reviews and visiting of the organizations all levels from overseas to domestic. In 2005, from time to time ARDY received the guests like The World Vision, The Conservation International, Partnerships for Community Development, the People’s Bank of China, and Dr. Ellen R. Judd from Manitoba University of Canada, Prof. Ma Jiujie from Renmin University of China, the leaders from the State Council Leading Group Office of Poverty Alleviation and Development, the officers from the Sichuan committee of CPPCC, the Journalists Association of Panzhihua City, the interns from South Western University of Finance and Economics, and etc, and we exchanged experiences and lessons broadly with them.

3、We participated actively in various training courses, accumulated the experiences of managing employees, also improved their capabilities and grades. Time and again, we took part in many courses like “Training on the Financing of Microfinance and the Using of Managing Software” held by the China International Center For Economic and Technical Exchanges in Renmin University of China, “Training on Setting Interest Rate and Control the Defaulting Loans” held by the Microfinance Training Center of the CitiBank, financing and audit affairs training held in Beijing by the China Association For NGO Cooperation, “The Experiences Intercommunion Meeting on Sichuan Youth Volunteer Training Workshop, Youth Staffs’ Training and Receiving Organizations” held in Chengdu by Partnerships for Community Development. After these training courses, ARDY enriched the experiences on some subjects like the management of computers, accounting, employees and defaulting loans, also we improved our internal control capabilities.

4、With the capital support from some international organizations, ARDY’s capacity rapidly upgraded. For Example: A、Mr. Ali from Grameen Bank of Bengal inspected and monitored the Yongle Program, and ARDY successfully gained ＄12,500 as the third trust funds of this program to enlarge the principal size; B、The Laubach International donated ＄8,000 again this year, which one half we used in the training courses of the staff to improve their grades, the another half we used on purchase of 1 video camera, 1 multiple-functional printer, 1 notebook and 3 desktops to tremendously improve our working condition and efficiency; C、Cooperated with the World Vision, ARDY subscribed the protocol on technical support items worthy of ￥59,000, and that also improved our organization’s capacity.

Ⅳ、Enhanced the internal management, promoted the construction of the organization’s internal control to a further step.

Enhancing the internal management is the precondition of ARDY’s development. Hereby, we regarded this job seriously and focused on several items as following:

1、We constituted some relevant bylaws to standardize the working operation. In the Employee Meeting at the beginning of the year, we proposed the essential of our jobs in 2005, and brewed a “Staff Management System” contained 15 items, meanwhile distributed a series of Association’s documents such as, 《The Regulations For Improving the Management of Microfinance》、《The Managing Ways on the Overdue Loans》, 《The Position Paper on Enhancing the Credit Control》 and etc. to each Departments and each Branches of the Association, thereby, ARDY used systematical constitutions to standardize and restrict the behaviors of our employees.

2、We strengthened ARDY’s jobs on daily information report and reinforced the feedbacks. Everyday we collected correlative working information from each sub-association including the intraday credit clients, amounts, repayment clients, receivable and paying principals with interests and lending plan of recent 3 days and so on. That made it convenient for controlling the dynamic business trends of each town and village, and also provided the reasons for decisions and managements.

3、We strengthened the ARDY’s jobs on inspection and audit. The staffs of financial department of the Headquarters keyed data into PC and informed and corrected in time while there was something wrong; the staffs of the credit department monitored the information of daily report and keyed them into professional credit software, on the other side, they also took some selective field surveys regularly or irregularly, that urged staffs operating as the regulations demanded. At the same time, we also dealt seriously with the employees who violated our regulations, for example, we publicly criticized the sub-association of Zhouhe Town for violating lending rules, and amerced some employees of Yongle Town for egressions without permission.

4、We reinforced the training of our staffs, this year we organized them a meaningful learning on the notions of ARDY, a visit to Dr. James Yen’s Museum in Bazhong, a series of learning of professional accounting and credit knowledge and the operation training of the MIS soft, and we also equipped the PCs to 3 sub-associations at town-ship, meanwhile, frequently we used conferences instead of admonishment to respect the working disciplines and regulations seriously, and strengthened the entire staff’s consciousnesses of ownership and responsibility, also improved their professional level and working abilities.

In conclusion, in the year of 2005, under the great support from all circles overseas and domestic, combined with the joint endeavor of the entire staff, ARDY gained the exciting achievements in some certain subjects such as microfinance for poverty alleviation, the construction of farmers’ organization, external intercommunion and cooperation, the internal management and etc. But we also confronted with some difficulties mostly in three aspects:

1、 The arrearage cumulated year by year was reached a huge amount, almost ￥2,000,000 in total, and the power of dunning the debts was not strong enough that resulted in an inefficient situation.

2、 ARDY is a kind of nonprofit organization for poverty alleviation, and we cannot maintain our self-financing because of frequent helps with nonpayment, the year-by-year budget deficits reached ￥850,000 in total which would definitely influenced ARDY’s long-term development and continuous poverty alleviation.

3、 The problem of direct personal interests of our employees has not been settled now, and their enthusiasm and go-aheadism for jobs need a further improvement.

In 2006, based on continuously reinforcing and developing the traditional microfinance business, combined with the opportunity of experimental units for “Advance Entire Village and Innovate Mechanisms to Build Harmonious New Village” that the Government practiced in Yilong County across-the-board, ARDY will continue to help and promote the constructions of farmers’ mutual cooperation organizations, and will realize the dual targets of poverty alleviation and sustainable development of the organization.

1、On the base of strict and efficient control, ARDY will stick to control the lending quality, steadily enlarge the credit size, strive for developing new 700 clients before the year-end, provide 1400 items of loans ￥7,000,000 in total, the credit margin will reach ￥3,800,000, and limit the risk rate under 4%, maintain the mature repayment rate at about 98% averagely.

2、We will actively seek the various financial mode of the fund at village-ship and small stock-bank to realize the multi-development of microfinance, and zealously propagandize the communities of villages, towns and the small-business-holders to buy the shares of “Economic Mutual-Cooperation Organization”, ARDY will actualized 650 units of shares by the year-end, and in other words, we will collect funds worthy of ￥650,000, in this year, we also will strive for promoting the naissance and development of civil mutual cooperation association (or small bank) shaped by stock system in the village fairs and towns.

3、We will continue to help and promote the construction of farmers’ mutual cooperation organizations at village-ship, during the same time we help and promote the sub-association of Kunshan and Jiuwan Village running independently, ARDY will try hard to gain the cooperation with the County Committee and Government to help more Villages establish more sub-associations before the year-end.

4、We will reinforce the power for dealing with the problems left over, and bring it into a special agenda to special study, we will focus on the endeavor for reclaiming the overdue lending and employees’ arrearages, meanwhile to enrich the profits and economize the expenses, ARDY will try to open a new branch in Jincheng Town to make up for the losses of the Headquarters.

5、To strengthen the external propagandas, intercommunions and cooperation, with widely collecting information to tighten the contact with current organizations in our list, ARDY will also try any ways to cooperate with more and more organizations included the relevant departments of local government, enlarge the money raising and introduce into new programs to promote the common prosperity between the organization and poverty alleviation.

6、We will enhance the training of the entire staff to improve their abilities and grades; meanwhile, we will try best to handle the problems of every employees’ direct interests, and to resolve some problems like the endowment and hospitalization insurances of the employees, regulation of their post salary and so on, that will inspire all staffs’ passion on their jobs and maximize their proactive initiatives to realize the long-term sustainable development of ARDY.

Jan 6^th, 2006