China's formal system is comprised of four state-owned commercial banks, rural credit cooperatives, rural commercial banks, the Agricultural Development Bank of China and postal savings. All are supervised by the People's Bank of China.

The informal sector includes illegal private banks, pawnbrokers, private pools of funds, and private discount and other credit organizations.

China's Rural Financial Status

1. Statistics from the China Banking Regulatory Commission show that 120 million out of 200 million farm households are in need of loans. By the end of the third quarter of 2005, 71.34 million households had sought loans from rural credit cooperatives, accounting for 32.3 percent of the total, with a total loan balance of 56.76 billion yuan, making up 37.2 percent of the total loans from rural credit cooperatives.

2. According to the People's Bank of China, the central bank, agricultural loans include short-, medium- and long-term loans and agricultural product procurement loans, mostly provided by the Agricultural Bank of China and the Agricultural Development Bank of China, rural commercial and cooperative banks and rural credit cooperatives. By the end of 2004, China's agricultural loan balance had reached 2.1 trillion yuan, accounting for 11.8 percent of the loan balance of all financial institutions.