IMD and the Agricultural Bank of China hold event to celebrate ground-breaking IMD case study of ABC’s business model
IMD recently held an event with executives from the Agricultural Bank of China (ABC), following close collaboration which resulted in a case study about the bank’s activities to finance farming in China. The event was led by IMD President Jean-François Manzoni and ABC Director Zhao Zhongshi, head of the Sannong (farming) finance.
In late 2016, the Agricultural Bank of China (ABC) was the fourth largest bank in the world and ranked 29th among the Fortune Global 500 companies. Established in 1951, ABC went public in 2010. It was the world’s biggest ever initial public offering at the time.
The case will also be commemorated with a plaque at ABC’s headquarters in Beijing.
The case details the innovative products and services that ABC provides to small farmers in China, no small feat as it is a sector without access to technology nor to financial products.
Arturo Bris, Director of the IMD World Competitiveness Center, led the preparation of the case and made a special trip to the Agricultural Bank to conduct research interviews.
In rural China, ABC provides an inclusive finance package, focusing on three areas: basic financial services for farmers, financial poverty alleviation, and loans to rural households.
It aims to serve a huge and widely dispersed rural population (589.73 million people as at the end of 2016). Compared to other regular financial businesses, providing credit and deposit services for farmers is confronted by three main obstacles: first, high service cost, high business risk and the fact that farming households are unable to provide lawful, effective and full loan guarantees.
The IMD case explores how the bank has innovated and provided social impact to serve a difficult to access population.
Read more about the case study: Promoting Inclusive Finance: Agricultural Bank of China