Gary: I'm off to Puerto Rico tomorrow and sorry for not being able to contribute's a write-up of what I found about the micro-finance thing. Use or edit as you see fit.

In September 2007, Alibaba started a microfinance program called "network collateral credit"(网络联保贷款) with Industrial and Commercial Bank of China (ICBC), and a total amount of 1 million yuan was loaned to three small and medium sized companies (SME) in Zhejiang province. It program has expanded ever since, with total outstanding loan reaching 420 million yuan. ICBC and China Construction Bank (CCB) are the partners of Alibaba in this program. By incorperating the state players, Alibaba could easily hurdle the regulation issues.

Currently, five types of loan are available to Alibaba's members:
1. Network Collateral Credit(网络联保贷款). Require more than three companies. Loans are approved by banks over review of the company's information provided by Alibaba.
2. Pure Credit(纯信用). Users with over 4 years "TrustPass" membership can apply for up to 1 million individually without security. Loans are approved upon successful interview with the bank. The program is limited to Zhejiang and Jiangsu province.
3. Mortgage(抵押贷款). Maximum 20 million from CCB (Limited to Zhejiang, Guangdong, Jiangsu, Beijing, Shanghai) and 30 million from ICBC (limited to Zhejiang).
4. Letter of Credit(订单融资).
5. Secured Loans (担保贷款)

Interest rate of these loans are:
Interest Rate
Network Collateral Credit
6-9%/over 6%
Pure Credit
Letter of Credit
Secured Loans

Notice that the lending rate SMEs can get from Alibaba's program is extremely low compared with typical imformal lending, which has interest rate as high as more than 20%. This program is especially meaningful when put into the perspective of rebalancing China's economy. SMEs, which takes only 40% of the national resources, creat more than 70% of China's GDP and employ more than 80% of the work force. Yet they often have hard times getting credits because banks usually favor big state owned enterprises. A major reason for this difference in preference is that SMEs are deemed less safe to lend to.

For the banks, the SME database Alibaba has to provide is a perfect rating tool. The absence of a credibility rating system has been a long time impediment for SMEs to get loans. With the program banks can look at companies' performace over the years and decide whether it's a "good" company. In fact, this works. Stats from CCB show that up until August 2009, non-performing loan rate for network collateral credit is 1.04%, which is lower than the usual rate.

2. E-commerce

· Government Models
1. Service Station Model
The service station model refers to an information service center that is government driven and provides information on a wide range of topics - everything that is considered locally relevant. Accordingly, the support of the government is critical, and human resources of related departments here are integrated to maximize the advantages of resources as well. In addition, service stations are located in rural areas close to farmers and convenient to farmers seeking assistance, so the network links government offices at three levels - county, township and village:
· county level station relies on agricultural departments for funding, content development and management.
· township level station is set up with the support of the township rural economic management, agricultural and technological extension and cultural service centres.
· village level station is established in villages where the production of a specific agricultural product or a group of products has reached a certain scale following with strong demand for information. Furthermore, the village “spots”, or mini stations, rely on the village committee and large farmer households of crop farming, animal raising and business operations for staff. As well, specialized farmer associations and dragonhead enterprises f agricultural industrialization and other intermediate organizations and businesses that can provide services to farmers also contribute to the village spots.
Since township and village service stations and spots are widely distributed in rural areas, they resolve the problem of the "last mile of connectivity" of information by providing service to farmers through multiple approaches.
The typical users of the service station model tend to be producers and agro-business operators of agricultural products from the local community.
Service Offered
With its three-level information service network, the service station model has more advantages than the other two models (such as the county information center updates and the information collecting tasks carried out by specialized agencies). Essentially the service station model has a large network that can be directly commanded by government so its reach in terms of gathering information is wider. However, the service station model usually provides only advisory information services while the content involves various agricultural production technologies, market detail, demand and supply of products and policy information.


2. Farmers' Home Model
Government backing in the form of policy support and funding is the first needed step in setting up a farmers' home. A farmers' home is located in an area with a large number of people passing by and easy transportation access, preferably close to a parking area.
As in the service station model, here also the human resources of different fields is consolidated. This type of one-stop open facility integrating agro-technological consultation, information service and business operations provides great convenience to farmers. Therefore, farmers' station model has become a popular resource for information and is a practical and easily applicable model for many rural areas in China.
The farmers' home model has the relatively broader reach to users, which includes local farmers, enterprises and specialized farmer associations as well as producers and agro-business operators outside the area. In other words, the service of the farmers' home has no geographic limitation.
Service Offered
At the farmers' home, farmers can get advisory information on agricultural production and management and purchase agro- production materials as well. While shopping for their farming needs, farmers can at the same time speak with sales representatives for the correct application methods of their purchases or any other product. Relevant technical materials are also distributed to farmers for free at the counters. When farmers have technical questions or want to know market information about certain agricultural products, they can turn to the consultation desk for assistance.


3. Association Model

This model works in counties where there is one major produce.
Because of similar interests, the farmers could form a specialized association on a voluntary basis. There must be volunteer who is enthusiastic about providing services to others.
The association offers its member’s information about their common interest but still the information can cover a wide range of technical, market, and policy issues.
As the association must operate as a business, an understanding of business management is crucial among at least a few
of the organizing farmers.

· ICT Application and platforms
1. Agriculture 110:
Agriculture 110 is an online website setup by provincial and county governments to provide instant agricultural technique inquiry and help for farmers.
The methods include online forum, as well as video conference system, in which the experts will log online at certain time to do video conference with farmers that have questions about their agricultural products, and also provides education in agriculturaltechniques.(
Farmers can join the online conference via their computer or through a computer in nearby computer station.

2. Farmer’s mailbox:
Farmer’s mailbox is an IT tool that provide registered farmers market intelligence, agricultural information via the Internet and cell phone text message technology.
Farmer’s mailbox is initiated by Zhejian provincial government to the farmers in its rural areas. There are about 1million users by 2008.
The services provided are:

· Market information
· Online agricultural exhibition

· Employment platform: job posting (SIPA Link for residents in rural area)

3. Alibaba
alibaba1.JPG is a company that provides online business-to-business (B2B) e-commerce platform. Founded in 1999, makes it easy for millions of buyers and suppliers around the world to do business online through three marketplaces: a global trade marketplace ( for importers and exporters, a Chinese marketplace ( for domestic trade in China. also offers business management software solutions targeting small businesses across China under the "Alisoft" brand.

Alibaba provides a platform for farmers to:

· Provide local or nation-wide Information: Including agricultural industry news, market trend and analysis
· Gain market demand supply information of different produce nation-wide
· Engage in E-commerce: Farmers can sell products to the market that is in demand of a certain kind of product. On the other hand, farmers can also buy seeds, equipments, and fertilizer online from sellers in different provinces that provide favorable prices and fees.
  • Provide online discussion forum: The forum includes topics in agriculture techniques discussion, product market sales inquiry, agricultural policy inquiry, etc.

1. Nokia-Siemens—Nokia Siemens Networks' Village Connection Project--Bringing eCommerce to rural areas in China
Nokia Siemens Networks launched Villiage connection project in 2008, carrying out several ICT solutionsto help the development of rural areas in different countries.
In China Nokia Seimens Network launched the eCommerce Solution pilot in rural China to provide internet shopping in rural areas. It contains an online Catalogue Sales Platform with products uploaded by urban businesses. As with Village Connection, this service is delivered to villagers through local entrepreneurs who provide access to the shopping platform.
The eCommerce Solution was devised and delivered in partnership with China Mobile in Fujian Province, and allows easy access to a wide range of consumer products to villages in Fujian – a vast market for urban retailers and distributors. The service also offers China Mobile an opportunity to explore new business models to help them improve their local presence in rural areas.
Through the eCommerce service, local entrepreneurs (mainly business owners in rural areas of Fujian) can expand their businesses, which are often limited due to their shop size and storage opportunities. The pilot scheme showed that during a five-month period business owners generated online transactions equal to the revenue they have raised from
traditional business.
The eCommerce Solution challenges traditional ways of conducting business and purchasing goods in remote locations. After a successful pilot, this business model is now being taken forward to other rural areas within Fujian Province.


2. China Mobile—Rural Area Development Project
China Mobile has implemented several ICT projects in China's rural areas to help connecting them to the world and help them develop business with the new technology.
The projects include building communication infrastructure, educating the locals to use these technologies and apply them to help their economic developments, etc.
Among all the different ICT projects, China Mobile aims to educate and help the farmers in rural areas to gain agricultural information and develop eCommerce with the "Enriching Infotmatio Technology Application in Rural Area" project.

  • Objection
    • Help implement government's "San-nong" policies (agriculture, villages and farmers) and efforts that will make sure farmers benefit from China's economic growth.
  • Solutions
    • Establishing the nationwide "Agricultural Information" Website ( to provide an informatio platform for farmers to access information serviceswhich include agricultural technology guide, market trend, labor information, etc.
    • Apart from the website, farmers can also access these informationby using mobile phone short message service by texting their inquiries to the service number "12582" to get the information they want
  • Services
    • China Mobile has introduced several services through the internet and mobile technology to help farmers, these include:
      • "Gong Xiao Tong" or eCommerce platform: to provide farmers with the tools to receive orders, manage commodity availability, marketing information and onlin payment to develop eCommerce for their products.
      • "Wu Gong Yi" or job hunting platform: to provide people in rural areas about the employment information in other cities.
      • "Mai Mai Yi" or sales platform: to provide farmers real time information of the demand of a certain product in an area and the unit price of the product in the sale and farmers can make sales directly with the buyer online. In addition, farmers can also post the information of their produce supply online for potential buyers.
  • Examples of the application of the Agricultural Information Website:
    • In GuanXi Province, sugar cane farmers use the website to gain information of sugar market and demand to increase their sales
    • In JianXu, aquatic produce farmers use his cell phone to access the information of the demand of freshwater produce.
    • In Chong Qin, the local people use the information website to gain information of employment market and job positions in other cities