维萨公司（Visa）：发展金融科技助力乡村振兴 Empowering Rural Revitalization through Fintech Development 2023

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EmpoweringRuralRevitalization

throughFintechDevelopment

Visa

ExecutiveSummary

TheimplementationofruralrevitalizationisamajorstrategicdeploymentmadebytheChinesegovernment.Financeisanimportantforcetosupportruralrevitalization.Comparedwithpovertyalleviation,promotingruralrevitalizationpaysmoreattentiontodevelopment.Thedemandforfinancialresourcesislarger,andthefocusoffinancialsupporttoruralareashasalsochanged.InSeptember2020,VisaandtheDevelopmentResearchCenter(DRC)oftheStateCouncillaunchedtwo-yearjointresearchon“EmpoweringruralrevitalizationinChinathroughfintechdevelopment”.ThepurposeofthispaperistoexplainkeyresearchfindingsandprovidepolicyrecommendationsbyDRC,withcasestudiesfromVisaassupplementalmaterials.

KeyWords:Fintech,ruralrevitalization,smallandmicrobusinesses,financialeducation

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Financeisanimportantsupportforruralrevitalization.Comparedwithpovertyalleviation,promotingruralrevitalizationpaysmoreattentiontoeconomicandsocialdevelopments.Thedemandforfinancialresourcesislargerandinvolvesmoreaspects.Althoughthetotalsupplyofruralfinancehascontinuedtogrowinrecentyears,itisstillfarfromthegoalofruralrevitalization.Movingforward,fintechwillserveasanimportantmeans.Itisnecessarytoactivelybreakdowntheconstraintsthatrestricttheapplicationoffintechinruralareas,whileenhancingtheabilityoffinancialservicestorevitalizeruralareas.

1.Themainbarrierstotheadoptionoffintechinruralareas

Atpresent,thedevelopmentoffintechinruralareasstillfacesmanydifficultiesandconstraints.Comparedwithurbanizationandmanufacturing,financialsupportneededforthe“ThreeRuralIssues”inChina(orSanNong)issignificantlydifferent,thustheobstaclesfacedalsovary.

Thedigitaldividerestrictstheapplicationoffinancialtechnologyinruralareas.Ruralresidentsandruralemployeesarenotveryfamiliarwithfintechtools.Therearefourmainreasonsforthat:First,ruralareasarestillweakinfinancialinfrastructure.TheInternetcoveragerateislowerthanthatincities,andthefoundationalfacilitiesthatsupportnewfinancialtoolssuchasmobilepaymentareinsufficient.Second,thelackofpropercollectionandutilizationofruralresidents’datamakesitdifficultfortheadvantagesofbigdatatoplayaroleinruralareas.Mostoftheruralresidentshavenotbeenregisteredintothenationalcreditinformationsystem.Third,therearestillgreatdifficultiesintheopeningandsharingofgovernmentpublicdatarelatedtoruralresidents.Fourth,comparedwithtraditionalfinancialinstitutionssuchasbanks,thebrandawarenessandtrusttowardfintechcompaniesandothernewfinancialentitiesarerelativelylow.Ruralresidentsstillneedalongtimetorecognizethebenefitsoffintechtools.

Ruralinfrastructuredoesnotprovidesufficientsupportforfintechapplications.Inrecentyears,China'sruralinfrastructureconstructionhasmadegreatprogress,butitisstilllackingcomparedwithcities.Mostofthefinancialinstitutionsinruralareashaverelativelysimpleserviceoperationswithlimitedfinancialofferingsandcoverage.SomeruralbankshavelimitedapplicationoffintechtoolssuchastheInternet,lackofcooperationwiththird-partyplatformsine-commerce,paymentandsettlement,andthedegreeofinformationpossessionanddatasharingisfarfromperfect.Incompleteinfrastructurerestrictstheapplicationoffintechinruralareas.Atpresent,thelogisticssysteminmostruralareasstilllagsbehind,andthelogisticsinfrastructureisfarfromenoughtosupportsupplychainmanagement.Theroleoflogisticsinpromotingthecirculationofruralcommoditiesisstillnotuptoexpectations,whichisakeyweaknessintheprocessofagricultural

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modernization.

Thestrategicandinvestmentfocusoffintechcompaniesismainlyincities.

Fintechgiantsgenerallydeployinfrastructureandkeyinvestmentinlargecitiesandcentralareas,andpayrelativelylittleattentiontoruralareas.Traditionalfinancialinstitutionsaremajorusersoffintech.However,inrecentyears,somefinancialinstitutionshaveshownatrendofshrinkinglocaloperationsandconcentratingincitiesanddevelopedareas.Exceptforsomelargestate-ownedcommercialbanks,policybanks,andruralfinancialinstitutions,thebusinessfocusofotherfinancialinstitutionsisgenerallyinurbanareas.Animportantreasonwhyfinancialinstitutionsandfintechcompaniesarenotmotivatedtosupportruralareasisduetothelowdegreeofruralagglomeration,insufficientassetrights,andlargeregionaldevelopmentgaps.

Theregulatorysupportneedstobestrengthened.Themismatchbetweenriskandreturnisanimportantfactorrestrictingfinancialsupportforruralrevitalization.Tosupportruralrevitalization,financialinstitutionsneedtopayhigheroperatingcostsandbeartheriskofassetqualitydeclineandbaddebtsincrease.Mostfinancialtechnologiesaredevelopedforcitiesinearlystagesoftheirresearchanddevelopment,andwilllaterbegraduallydeployedtoruralareasafterbecomingmoremature.However,theadaptabilitytoruralareasissometimesinsufficient.

2.PolicyRecommendations

Themaingoaloftheapplicationoffintechinruralareasistopromotethedevelopmentofruralindustries,focusingonimprovingtheoperationalefficiencyofagricultureaswellassecondaryandtertiaryindustries.Atpresent,theapplicationoffintechinruralareasismainlyrestrictedbyinsufficientinfrastructure.Itisnecessarytoadvancetheconstructionofruraldigitalinfrastructure.Also,relateddevelopmentshouldbebasedoncommercialsustainability,whichwouldattractfinancialinstitutionsandtechnologycompaniestoinvestinruralareasinalongerterm.

First,focusonsupportingmarketentitiesthatcanimproveagriculturalproductionefficiency,mainlyincludinglarge-scalebusinessentitiessuchascooperativesandfamilyfarms,ruralproductionandprocessingenterprises,andruralserviceenterprises.Throughsupportingthesemarketentities,thegovernmentcanfurtherpromotethedevelopmentofruralindustries,increasefarmers'income,andenhancetheendogenouspowerofruralrevitalization.Thegovernmentshouldalsoencouragelocalfinancialinstitutionstoexploreeffectivewaystoapplyfintechlocally,uselocalinformationresourcestobetteranalyzeandtapthepotentialneedsofruralcustomers,innovatefinancialproducts,andmeetthegrowingfinancialneedsinruralareas.

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Second,improvethetechnicalandbusinessenvironmentthatsupportsthedevelopmentofsupplychainfinance.Deepentheinformatizationofindustrialchains,strengthendatasharingwithfinancialinstitutions,andencouragebankstoissuecreditfundsforagriculturalbusinessentitiesbasedonthedata.Advancethecoordinationoftheindustrialchainandimprovetheindustrialecologicalsystem.Leveragethecoordinatingpowerofcooperativeeconomicorganizationsamongupstreamanddownstreamstakeholders,anddevelopsupportingdatamanagementsystems.Strengthentheroleoflocalgovernments,integrateagriculturaltransactioninformationonlocalpublicserviceplatforms,encouragebanksandotherprofessionalserviceinstitutionstoparticipateinsharingrelevantinformation.

Third,innovatefintechproductsthatmeettheneedsofrurale-commercedevelopment.Innovateproducts,suchase-commercemicro-loans,jointguaranteeloansforfarmers,andinventory-backedloans,toadvancetherurale-commerceindustry.Attractsocialcapital,raisespecialfunds,promoteinvestmentinrurale-commerceprojects.Promotetheestablishmentofamaturerurale-commerceguaranteesystem,supportstate-backedinstitutionstoincreasethecreditofrurale-commerceoperatorsandprovidefinancialsubsidies.Accordingtotheneedsofdigitalfinancialdevelopment,timelyimprovelawsandregulationsandcarryoutfinancialeducationactivities.

Fourth,acceleratetheupgradingofruraldigitalinfrastructure.FocusoninformationinfrastructuresuchasthemobileInternetandtheInternetofThings,strengthenthecoverageofcommunicationbasestationsinruralareas,expandnetworkbandwidth,andprovidebasicsupportfortheapplicationof5G,bigdata,andartificialintelligenceinruralareas.Activelyimprovethepenetrationofmobilepayment,establishanefficientruralpaymentservicessystem,andimprovetheefficiencyofruralpayment.Supportfinancialinstitutionsandfinancialtechnologycompaniestosinkdowntothecountryside,buildunmannedbanks,smartcounters,etc.,andencouragesmallandmedium-sizedfinancialinstitutionstoacceleratedigitaltransformation.Strengthenfinancialeducationinruralareas,enhancefarmers'andruralenterprises'understandingoffintech,andincreasetheirenthusiasmforapplyingfintechtechnologies.

Fifth,activelyimprovethefintechstandardsystem.Formulateuniversalstandardsforagriculturaldatatransmissionprotocols,datastorage,andintegratedapplications,improvedatainteroperabilityandsharing,andpromotetheindustrializationoftechnologyapplications.Promotetheintegrationofagriculture-relateddata,establishadatasharingmechanismbetweencoreenterprisesandgovernmentdepartments,enhancetheopennessandsharingofdataforruralproductionandmanagemententities,andprovidecreditsupportforagriculturalandruralmanagemententitiesinfinancing.Encouragefinancialinstitutionstocarryout

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scientificandtechnologicalinnovationprojectsforruralrevitalization.

Sixth,usefinancialtechnologytoimprovethelevelofruralfinancialriskcontrol.Activelyusefinancialtechnologytoimprovetheabilitytodiscover,monitor,warnanddealwithrisksinruralcreditfunds.Usingbiometrics,InternetofThings,sensorsandothertoolstoexplorelivemortgageloans,toachieveprecisefinancialsupportforlargefarmers.Financialinstitutionsshouldleveragetheiradvantagesindatamanagement,useinformationfordecision-making,andbetterbalanceriskcontrolandbusinessoperations.

3.InternationalExperienceforSmallandMicroBusiness

Empowerment

InChina,theBeijing2022WinterOlympicGamesarecontributingtotheexpansionoftourism,culture,andwintersportssectorswithinChina,especiallyinhostcitiesandprovinces.TheGamesbringmorerevenueandgrowthopportunitiestolocalurbanandruralbusinessesinthehostprovinces.Manymicroandsmallbusinesses,however,donothavethecapabilitiesorresourcestotakeadvantageoftheseopportunities.Inordertoaddressthesegaps,Visalaunchedthe“Beijing2022andWomenProgram”inDecember2019inpartnershipwiththeChinaWomen’sDevelopmentFoundationandBeijingSportUniversity.Theprogramtargetstoenablewomen-ledmicroandsmallbusinessesintheBeijing-Tianjin-Hebeiregions(alsoknownasJing-Jin-Ji),throughadiversemechanismtobuildfinancial,digital,andbusinessmanagementskillsandcapabilities.Theprogramalsoprovidesaccesstoexternalresourcesandbuildsalocalcommunityofwomensmallbusinessownersforongoingexchange,knowledgesharingandsupport.

Inearly2020,theprogramteamconductedabaselinesurveyamongnearly500womenwhoweresmallbusinessownersinthesectorsoftourismandcultureinYanqingandZhangjiakoudistricts.Mostsmallbusinessesinthetourismandculturesectorsinthesedistrictsprovideruralhospitality.About70%ofrespondentswereoptimisticaboutopportunitiesBeijing2022presentandlookedforwardtomorebusinessopportunitiesbutwerenotcertainhowbesttoprepare.Thethreemostcommonchallengestheycitedwere:lackofdigitalcapability,limitedaccesstofinanceandcredit,andfinally,alackofinformationandaccesstoknowledgeresources.

Basedonthebaselinefindings,theprogramdevelopedanenablementmechanismwithtrainingcourses,developmentgrants,andnetworkingplatformforwomensmallbusinessowners.FromJuly2020toJanuary2021,theprogramdeliveredtworoundsofpilotcoursesto1,250womeninYanqingandZhangjiakou.Asof2022,theprogrambenefitedatotalof6,254womensmallbusinessownersintheJing-Jin-Jinarea,coveringover40specifiedsectors.

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Toevaluatethefinalprogramresults,theprogramteamcollected1,024validquestionnaires,andexaminedparticipantdata,courseperformanceandfeedbackonspecificcoursemodules.Thesurveyresultsshowthattheoverallsatisfactionrateis87.3%,andnearly70%oftheparticipantsreportedthattheprogramhadhelpedstrengthentheirunderstandingofrelatedpolicies,marketsandindustries.

Thesurveyresultsfoundthatsmallandmicrobusinessownersgenerallylackbasicknowledgeandskillsrelatedtofinance.Thisispartlybecausefinanceismorespecialized,whiletheeducationleveloffemalesmallandmicrobusinessownersisgenerallylow,anditisdifficultforthemtolearnthroughordinarychannels.Basedonthesurveyfeedback,coursessuchasprecisionmarketing,financialmanagement,communicationandnegotiationskillsaregenerallyconsideredtobethemostbeneficialmodules.Inaddition,theprogramalsohelpedestablishacommunityoffemalesmallandmicroentrepreneurs,bringinggroupsupportanddevelopmentopportunities.Morethanone-thirdoftherespondentssaidthattheprogramhadhelpedthembroadentheircooperationopportunitieswithotherfemaleentrepreneurs.Afullprogramevaluationreportwillbepublishedshortly.

Enablingwomen-ownedsmallbusinessesisadurablelegacyofknowledgeandpeernetworkstohelplocalcommunitiesgrowandthrive.SupportingthedevelopmentoflocalsmallbusinessesandtheirgreaterparticipationinhostingoftheGamescontributestotheOlympiclegacyofBeijing2022andthesustained,inclusivesocio-economicdevelopmentoftheJing-Jin-Jiregion.Withmeasurableoutcomesandhumanlevelstories,thisprogramalsoprovidesademonstrationapproachtocitieshostingmajorsportingandothereventsaroundtheworld.InordertocontinueVisa'ssupportforfemalesmallandmicroenterprises,VisacollaboratedwiththeChinaFoundationforDevelopmentandFinancialEducation(CFDFE)in2022andjointlylaunchedathree-yearproject,focusingonnewfemalefarmersinruralareas.Theprojecttargetstoprovideskillstrainingsupporttowomenentrepreneursinruralareastoenhancetheirmanagementcapabilitiesandimprovetheirabilitytoparticipateinruralgovernanceandinnovationand,addingendogenousimpetustoregionaldevelopments.Theprojecthascompletedfourroundsoftrainingcoursesin2022formorethan150participantsfrommorethan10provincesandcities.

TheGuangdongProvincehasattractedalargenumberofsmallandmicroenterprises.Inordertohelpsmallandmicroenterprisestoflourish,in2022,undertheguidanceandsupportofthePeople’sBankofChinaGuangzhouBranch,VisaandCFDFEjointlylaunchedaprojecttoenhancethefinancialcapabilitiesofsmall,mediumandmicroenterprisesinGuangdongProvince.The3-yearprojectaimstoprovidecomprehensivefinancialempowerment