Published on : Apr 16, 2015
The total number of villagers in China with bank account has surged exponentially in recent years. This rise in number is believed to be triggered by Beijing’s enhanced effort dedicated for rural development, which has prompted a significant number of the state owned banks to open branches across the hinterland.
According to the data provided by the World Bank, by the end of 2014, 74% of the adults residing in rural areas had their banks accounts. Three years ago only 54% of the village adults had their bank accounts. Throughout China, 79% of the population has bank accounts as compared to 64% recorded in 2011. It is important to note, according to the survey conducted by the World Bank by the end of 2013, China had almost 53% of its population living in urban areas.
The rural areas in China traditionally had insufficient banking or financial services. Most of the banks in the country were hesitant to open their branches across rural areas, owing to cost associated with the same. However, in recent years, Beiging has augmented the transfer of payments to rural areas for health care and agricultural services. Such government to person transfers had a significant impact on the total number of people who use banking accounts.
This is largely because when government has any subsidies planned, whether it is for old age support, or it is for agricultural and healthcare purpose, the amount is always transacted through banking services. These benefits offered by the governments are really difficult to monitor and distribute directly without any electronic mechanism. Such factors have boosted the development of banking services across the rural areas in China.