China has been the fastest growing economy in the world over the last two decades, registering annual real GDP growth of, on average, 8%. China expects to maintain robust growth for the foreseeable future. While this unprecedented market-oriented, reforms-driven growth has brought considerable economic transformation to China, much remains to be done about poverty alleviation. According to a recent report, 100 million of China’s population still lives below the $1 per day consumption norm.
Funding the Poor Cooperative (FPC) is one Chinese microcredit program that is doing something about it – not only by directly impacting the lives of its members, but also by setting out to demonstrate through its own success the efficacy of sustainable microfinance programs in the eradication of poverty.
FPC was started in 1993, led by a team of scholars engaged in research on poverty issues and rural development, seeking new and more effective ways of utilizing and distributing funds to the poor. FPC works through local officials at the national-level, providing them with training and later monitoring and evaluation of their work.
In 1994, when the first branch was opened in Yixian County, the target set was for one branch to be set up in each county, serving 1,500 clients by 1997, and for these three branches to achieve operating self-sufficiency within 3-5 years, based on a loan recovery rate of 95% to 98%.
By 1997, the three branches started in Yixian, Yucheng, and Nanzhao counties have achieved the set goals and FPC was deemed to be a viable poverty alleviation tool for use in China. Expansion of outreach began in earnest the following year.
As of September 2002, FPC’s membership had grown to 15,873.