As the first shelf-offering ABS specifically targeting rural vitalization and poverty alleviation, CICC-Guicheng Hui Nong Microfinance Asset-Backed Securities was successfully approved by Shanghai Stock Exchange on March 20th, 2018 with a total offering size of RMB 4 billion. Through the measure of securitization, the transaction effectively applies the policies of aiding agriculture and benefiting farmers, and supports innovative Tech-Fin services for low-income farmers and rural entrepreneurs. CICC acts as the Plan Manager and Underwriter for the transaction.

The 19th CPC National Congress highlighted the rural vitalization strategy, clearly stating that the issues of agriculture, rural areas, and rural people are fundamental to China as they directly concern our country’s stability and our people’s wellbeing, and hence setting rural vitalization as a top priority task. In February 2018, the CPC and the State Council issued “The Opinions on Implementing the Rural Vitalization Strategy”, calling for removing poverty as a prerequisite for rural vitalization, which required taking targeted measures in poverty alleviation to help people lift themselves out of poverty. “The Opinions” also emphasized the benefit of financial services for rural vitalization, and made rural area the key focus in developing inclusive finance. In September 2016, China Securities Regulatory Commission released “The Opinions on Making Use of the Role of Capital Market to Serve the Country in Poverty Alleviation Strategies”, which pointed out the importance of capital market as a part of the country's poverty alleviation strategy.

The asset pool consists of eligible agricultural loans (i.e. Selected based on industrial, commercial, corporate trade data and models, these loans are originated to eligible farmers and rural enterprises for production activities.) and micro-finance loans for small enterprises. Majority parts of the pool are agricultural loans. The ABS transaction utilized rural e-commerce and risk management system to identify the financing need of poor people through rural partners and leading enterprises in rural supply chain. The originator, Huaneng Guicheng Trust, issued agricultural loans to eligible rural households and enterprises to fulfill their production and operational demands with funding from securitization. The rural financial program has provided services for 816 state-recognized impoverished counties and special contiguous poverty areas in 22 provinces across the country. Up to date, the program has issued RMB 3.8 billion of loans to 1.86 million micro-enterprises and RMB 32.5 billion of loans to 930,000 farmers, supporting their business in aquaculture, production, and rural ecological industries. The transaction not only provided farmers with convenient and cost-effective financial services, but also started a virtuous cycle for endogenous poverty alleviation.

As an investment bank visioning “Chinese Roots, International Reach”, CICC will stand ready in response of the policies from the CPC, the State Council, CSRC and the Securities Association to win the battle against poverty. Focusing on boosting rural development by promoting rural financial services through capital markets, CICC will continuously activate the endogenous power of China’s impoverished counties.