Zhejiang Tailong Commercial Bank
ZhejiangTailong Commercial Bank
company_type = Private
company_slogan = Partner of midsized and small business growth
foundation = Luqiao
Precinct, Taizhou, Zhejiang
June 28, 1993)
key_people = Mr. Wang Jun (王钧), Chairman of the Board and
Mr. Jin Xuanyu (金轩宇),
Chief risk officer
revenue = CNY 132
millionbefore tax ( 2006), around $16.5 million
(Asset = CNY 240
million( 2006), around $ 30 million
num_branches > 600 (2007)
num_employees = > 600 (2007)
homepage = [http://www.tlxys.com www.tlxys.com]
ZhejiangTailong Commercial Bank (浙江泰隆商业银行) is a small Chinese commercial bankin Taizhou, Zhejiang. The bankhas a relatively short history but its fame is much greater than its small size and short history, because it is credited by many as the Chinese equivalent of the Grameen Bank, the bankfor the poor in China, though there are some significant difference between the two.
bankhad a very humble beginning as a credit unionwith an asset of only one million RenminbiYuan and seven employees in two small rented rooms dated back on June 28, 1993. The bankhas since gradually expanded and today, it has a total of nine branches in addition to its headquarter and ranked number two among the biggest eleven local banks in the Luqiao Precinctof Taizhou, Zhejiang, with 21.9% of total local deposits, and 20.27% of total local loans by the end of 2006. On August 15, 2006, the status of the bankwas successfully upgraded from credit unionto commercial bank, and thus was accordingly renamed as Zhejiang Tailong Commercial Bank (浙江泰隆商业银行) from its original name Taizhou City Tailong Urban Credit Union (台州市泰隆城市信用社).
credit unionwas performing adequately in the first half decade since its birth, it was struggling in the fiercely competitive Chinese market, then around 1998, the information on Grameen Bankand its founder Dr. Muhammad Yunusreached the managerial corps of the bank, Dr. Yunus and the Grameen Bankwere not as famous as they are today, but the chairman of the board of the Chinese credit unionwas quick to realize that the general direction for his bankwould be in the similar path: continuing to focus on its current clientele of small and mid-sized business (most of which are rural populace) by providing better services.
Since its incept, the
bankhas provided over 60 billion CNY (around $ 8 billion) to its clientele, and over 90% of which are peasants whose lands were confiscated and laid-off workers from the state-owned enterprises (around $ 6,400) For its loans made to microbusiness which averages 51,000 CNY (around $ 6,400), over 90% of the customers are peasants turned entrepreneurs whose lands were confiscated. When these people were forced to turn to small business owners for survivla but was turned away by bigger banks due to the lack of credit history, ZhejiangTailong Commercial Bank (浙江泰隆商业银行) opened its door to them. One of the practice of the bank is that the bank must adjust its hour to that of its client. For example, if a client is vendor close at 9:00 pm, then the bankmust not close at anytime earlier than 9:00 pm because the vendor may need to go to the bankafter she/he closes. The bankprovides rapid service to its customers in that new customers would have the money deposited into their accounts in two to three days by the latest, while old customers could have it done as fast as in 20 minutes. Over 90% of the approved loans would have the money deposited within half a working day period.
bankhas focused continuously on helping the disadvantaged and instead of opening more branches in wealthy urban centers, it opens branches in the less developed regions to help peasants. When the bankopened its branch at Tri-gate (Sanmen, 三门) county, one of the poorest in Taizhou, Zhejiang, the bankfollows a policy that other banks consider strange at the first: the bankwould not make any loans that is greater than CNY 5 million. The reason was that most individual customers in the region cannot afford to have such great amount and if the bankconcentrate on making big loans like other major commercial banks, it would no longer serve its original purpose of helping the poor.
Since its clientele often lacks the assets required by larger
banks when applying for a loan, the Zhejiang Tailong Commercial Bank developed a method similar to the American immigration system: sponsorship. No customer is required to have any assets when applying for a loan, but he or she must have at least one or more sponsor who is responsible for the loan, and these sponsors are those who are very close to the customer and thus know the customer very well. Even when the customer does have assets, sponsorship is still required as a mean of credit check / insurance, because most Chinese lack credit history. Over 90% of loans made is less than one million CNY (around $ 125,000.
The 200+ loan officers who greatly contributed to the success of the
bankis consisted of more than one third of the total staff. Due to the lack of credit history in China, the loan officers were tasked with much more duties than their western counterparts, including investigating the loan applicants’ credit based on the following criteria:
*Cashflow of the business, including to ability to pay back the loan.
*Management of the business, including the person’s reputation and managerial ability
*Marketing, including the competitiveness of the product and the sensitivity to the market
*Production, including assets and stockThe loan officers are required to start the initial investigation within one to three days after the application and then perform periodic but often unscheduled audit after the loan is approved.
In addition to the work of loan officers, the banks also institute a strict policy of not making any new loans to customers who still have not completely paid back an earlier loan. As a result of these measures, the
non-performing loans of the bankhas never exceeded 0.9%, and mostly are kept at less than 0.83% range. Even for the non-performing loans, over 90% of which were paid back by the applicant without the help of sponsors.
bankis also famous for its harsh policy set for its employees: once a customer of the bankwith good credit history offered to lend his BMW sedan to a loan officer for a joyride, and the loan officer accepted. When this was revealed, the loan officer was immediately fired. Such strict measured helped to keep the corruption in check and has helped to earn a good reputation for the bank. As a result, customers trusted the bank and had come back repeatedly: The bank had maintained a core of long term customers of more than 8,000, and the total number of local small and mid-sized business that have borrowed money from the bankhas already exceeded 30,000, with many of them borrowed more than 100 times.
Although many in China as well as outside China termed the
ZhejiangTailong Commercial Bank (浙江泰隆商业银行) as the Chinese equivalent of the Grameen Bank, which certainly provided valuable experience and guidelines for the Chinese bank, the two are actually significantly different. The most important difference is that the Chinese bankis purely operating in the commercial mode and does not receive or provide any form of subsidize to or from anyone, because the bankexecutives do not believe that they are a charity organization.
* [http://www.tlxys.com Zhejiang Tailong Commercial Bank homepage(Chinese)]
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