Wokai News

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Featured speaker Calvin Chin (leftmost) with Wokai volunteers

The Beijing chapter kicked off this year’s first “Drinks for a Better World” event last Tuesday at the trendy D-Lounge bar in Sanlitun. Over 70 supporters of Wokai demonstrated their commitment to microfinance by braving the record cold temperatures in Beijing. The event continued to attract an eclectic group of professionals, students, and microfinance enthusiasts.

Calvin Chin, the CEO of Qifang (www.qifang.com), the first Chinese online student loan community, discussed how his company got started and how it plans to address the growing need for college financing in China.

Qifang is dedicated to promoting education in China and has developed an innovative platform to connect students with individual lenders. Similar to Wokai, Qifang utilizes web technology to expand access to loan capital by enabling individual to individual contact. Just as one Wokai borrower has access to thousands of potential lenders, one student can overcome traditional barriers to obtain a loan through Qifang. As Mr. Chin stated during the event, “Before the web, this business model wasn’t possible”.

Sara Jane Ho, a business development volunteer for Wokai, also gave a talk on microfinance in China and how Wokai has established a strong position in the country. Her presentation provided valuable background information on how microfinance works and how it will develop in the future. The two talks were both inspirational and enlightening, providing an opportunity to hear about how the models used by Wokai and Qifang can empower individuals to better their lives.

“Drinks For a Better World” (DFBW) is the Beijing Chapter’s bimonthly public event that provides a forum to discuss issues related to microfinance. The goal is to provide a relaxed setting for supporters of Wokai to network, learn, and have fun. This week’s DFBW was a great beginning to a year in which Wokai plans to greatly expand the number of borrowers it helps.

According to this fairly recent China Daily article, the country might be facing a much grimmer plight of poverty than what the official numbers declare... The bottom line is, no matter how the Chinese government defines poverty, there are still 150 million people in this country - or roughly 10 percent of the Chinese population -  living on less than $1 a day.

The number of people in China defined as poor would at least triple if not for the country's decades-old poverty line, a top agriculture expert said.

...

China's poverty line of 1,196 yuan ($175) per capita net income a year is said to be too low compared with the country's economic development and living standard.

At the end of last year, China had 40 million people living below the poverty line, accounting for 4.2 percent of the total rural population, according to the State Council Leading Group Office of Poverty Alleviation and Development.

However, the actual picture is far more worrying, mostly because of the outdated standard.

"We are now measuring a poor person with the standard of 30 years ago," Li said.

"The official poverty line is far below the current, actual poverty level."

China set a poverty line of 206 yuan in 1986, which was about $50 if calculated at the then exchange rate and was about half of a farmer's annual income.

Today, 1,196 yuan is just 25 percent of the average annual per capita income of the country's rural population in 2008.

China's poor actually totals 150 million, if using the internationally accepted $1 per day guideline, Li said.

The figure, previously less mentioned in China, is now cited by top officials on major international issues such as climate change.

Premier Wen Jiabao on Dec 17 at the Copenhagen conference on climate change said China is a developing country with 150 million poor people.

Professor Li Xiaoyun estimated that about 20 to 30 percent of the rural population is vulnerable to being driven back to poverty due to sudden sickness, natural disaster or economic recession.

A well-developed safety net needs to be quickly established in rural areas to enhance the immunity to poverty among farmers, Li said.