Yu Changfu felt desperate when his house collapsed in the magnitude 8 earthquake in Sichuan province in May last year. He had no money left to earn a living after rebuilding his home.

So he turned to a micro-loan program for small borrowers called the Grameen-CPAD-Danone Micro-Credit Initiative.

The 41-year-old farmer in Mianzhu, one of the hardest hit cities in the devastating quake, borrowed 10,000 yuan earlier this year to raise pigs and rabbits and buy a machine to mill rice.

Last month, he sold several pigs, earning more than 2,000 yuan. "I have confidence in repaying the loan and starting a new life," he said with a smile.

To express his gratitude, Yu had a silk banner made and presented it to Eric Lam, program leader of the Danone China Social Program, during Lam's recent visit to Yu's new home in Mianzhu.

Based in Paris, French food and beverage producer Group Danone (known as Dannon in the United States), has dedicated its corporate social responsibility agenda in China to poverty relief in rural areas.

Grameen Trust is a sister agency of Grameen Bank, the famous Indian bank that pioneered micro-loans for poor borrowers without collateral. The bank's micro-loan programs now are being implemented in developed and emerging countries around the world.

After last year's Sichuan earthquake, Danone and Grameen Trust told China's State Council Leading Group Office of Poverty Alleviation and Development (CPAD) that the company and trust wanted to help assist with reconstruction.

On July 30, 2008, Danone, Grameen Trust and CPAD signed an agreement to establish the Grameen-CPAD-Danone Micro-Credit Initiative with a donation of 20 million yuan from Danone.

Grameen Trust provides technical backing for the initiative and CPAD offers policy guidance. The China Foundation for Poverty Alleviation (CFPA), an organization under CPAD, is in charge of its implementation.

"The initiative is aimed at providing sustainable credit support to poor farmers and other people affected by the earthquake, so that they can earn a living and improve their living standards," said Liu Dongwen, CFPA deputy executive director.

Six cities and counties have been chosen for the trial initiative. They are: Mianzhu and Shifang cities in the quake zone, Kulun county in Inner Mongolia autonomous region, and Wuyi, Wanquan and Pingquan counties in Hebei province.

"Within three years, the initiative is expected to provide loans of 168 million yuan for 24,000 farmers each year. In the long run, the initiative will be spread to more poor regions," Liu said.

CFPA piloted the initiative in Mianzhu at the beginning of this year, establishing the Mianzhu Branch Office of CFPA Microfinance Management Co Ltd.

In March, the initiative was formally introduced across China. By the end of August, it had provided loans surpassing 16 million yuan.

"Nearly 6 million yuan was devoted to Mianzhu, benefiting 338 farmers. And 298 families have rebuilt their houses in Sichuan, while 40 families restarted their businesses or expanded their business coverage," Liu said.

Li Chenghai, 47, is a farmer in Shuangtu village in Zundao town in Mianzhu.

Before the earthquake, he ran a home decoration company with a friend in Mianzhu. Since he had not repaid a loan borrowed from a local credit cooperative, he could not obtain a new loan to rebuild his home damaged in the quake.

Li Chenghai obtained a loan of 10,000 yuan from the CFPA program bank branch. Now he is helping other villages rebuild their homes for a small fee.

"I will use the payment to repay my loan. And I am optimistic in life," Li said.

The micro-loan program does not require a mortgage or other collateral from the borrower, said Li Jiaying, a customer manager at the Mianzhu Branch Office of CFPA Microfinance Management Co Ltd.

"He or she only needs to find a warrantor. After one files the application, he or she can get the loan between three and seven days," Li Jiaying said.

Li Jiaying, 33, is a farmer in Qinjiakan village in Zundao town in Mianzhu who applied for the customer manager job after hearing about the initiative.

Since the initiative launched in March, Li Jiaying has helped 188 farmers obtain loans altogether valued at more than 3 million yuan.

The CFPA's Liu said the loans have ranged from 5,000 yuan to 30,000 yuan.

He said that the initiative soon will be implemented in other earthquake-hit regions in Sichuan.

(China Daily 09/21/2009 page10)