- supporting central bank lending in a more regionally balanced and well - targeted manner. timely and appropriate adjustments should be made to ensure that such central bank lending be used for its intended purpose. a favorable reserve requirement ratio is granted to rccs to help channel more funds to the agricultural sector. third, reinforce financial service infrastructure in rural areas. the establishment of a nationwide clearing center for rccs has helped them gain access to the lvps and local clearing system in a timely manner. meanwhile, efforts have been made to advance the development of credit reference system in rural areas and promote the use of bankcards and improve rural financial environment. fourth, support and cooperate with competent authorities to standardize the transfer of land contracting and operation right and to reform the institutional arrangements of rural land use. the pilot project of loan extension against the collateral of rural land contracting and operation right and the right to use rural housing site has been conducted to meet multitiered and diversified needs for financial services in rural areas. the pbc operation office has implemented the arrangements made by the pbc headquarter by guiding financial institutions in its jurisdiction to bolster the support of balanced urban - rural development. opinions on providing financial support for building socialist new countryside in beijing and guiding opinions on providing financial support to form a new pattern of balanced urban - rural development in beijing have been launched to advance rcc reform and assess the output of credit policies, adding more vitality into the rural financial system in beijing. following the guidelines, commercial banks have actively innovated financial products and improved operation mechanism and services, yielding positive results. this year marks the last in the 11th five year plan. what ’ s more, it is a critical year in mitigating the impacts of the international financial crisis and maintaining stable and fairly rapid economic development. all this underpins the importance of further improving the work of supporting agriculture, rural areas and farmers. with new challenges to achieve leapfrog development in the agricultural sector, there is a stronger need to shift the pattern of agricultural development and fill in the gap between urban and rural areas. finance lies at the center of modern economy and thus financial support plays a key role in balancing urban and rural development and bolstering the agricultural sector, therefore the pbc will make targeted and prioritized efforts to strike a balance between short - term and long - term development. first, establish a sustainable mechanism of providing rural financial services. efforts have been made to improve agro - linked financial risk compensation system

royal highness princess maxima was a member of the advisors group to the united nations international year of microcredit 2005 has undoubtedly contributed to the growing involvement of the dutch in microfinance. and, she continues her work as a member of the un advisory group on inclusive financial sectors. finally, by way of a conclusion i will identify some challenges for the future. microcredit – what is it? microcredit is the extension of very small loans ( micro loans ) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. these individuals typically lack collateral, steady employment and a verifiable credit history. therefore they cannot meet even minimal qualifications to gain access to traditional credit. microcredit is a financial innovation which originated in developing countries where it has successfully enabled extremely impoverished people ( mostly women ) to engage in self - employment projects that allow them to generate income and to begin to build wealth and ultimately to exit poverty. thanks to the success of micro credit, many people in the traditional banking industry have begun to realize that these microcredit borrowers can be seen as pre - bankable. microcredit is gaining credibility in the mainstream finance industry. many traditional large finance organizations are now considering microcredit projects as a new source of future growth. how does microcredit work? as you all know, microfinance has been invented by nobel prize laureate muhammad yunus, who was here last year when he received the four freedoms award by the roosevelt foundation. in the 1970 ’ s professor yunus was working at the chitttagong university in bangladesh. at that time, he started experimenting with providing small loans to the people in the villages surrounding the university. in 1976 he started the now famous grameen bank with help from the government. the goal was simple : providing small loans to the very poor. regular banks would not provide such loans because they considered them too risky – poor people typically lack collateral – and too costly. the small scale of the loans and high monitoring costs for each individual loan typically increase operational costs. an interesting feature of grameen bank ’ s initial lending methodology is that loans were provided to groups rather than to individuals. let me briefly illustrate how some of those first schemes worked in practice. two members of a five - person group receive their loans first. if all instalments are paid on time, the initial loans are followed four to six weeks later by loans to two other members. after another four to