The State Council issued a circular on Aug 24 concerning a trial run for rural contract land mortgages and rural housing property mortgages to help expand financing reform in rural areas.

The move is aimed at innovating mortgage practices in rural areas so that resources, capital, and assets could be efficiently allocated and used to inject more capital into agriculture production, increasing farmers’ income and speeding up modernization in rural areas.

The trial run will streamline the loan management procedures, encourage financing institutions to offer mid- and long-term loans, establish risk protection mechanism, and require the People’s Bank of China to offer support to financial institutions.

It will be carried out in counties, county-level cities, and city districts that meet the following standards: property transfer market is flourishing and healthy; farmers have a strong will in land transfer; and rural credit environment is preferable.

The People’s Bank of China will coordinate with the Office of Central Rural Work Leading Group, Ministry of Finance, Ministry of Land and Resources, Ministry of Housing and Urban-Rural Development, Ministry of Agriculture, and other government departments to implement the plan.

According to the circular, the trial run will be done before the end of 2017.