Guo Zhiwen, chairman of Harbin Bank, discusses establishment of Asia Financial Cooperation Association and its bid to go global.
December 06, 2013 | Alice YangIn a meeting with Guo Zhiwen, chairman of Harbin Bank, a city commercial bank located in northeast China which differentiates itself from its peers as a small and micro-business lender, the young and promising banker shared his views on the Asia Financial Cooperation Association (AFCA), a regional financial institution established to facilitate deeper communication and cooperation amongst small and medium-sized banks as well as non-bank financial institutions in Asia.
Establishment of AFCA
The AFCA was a joint initiative launched by China Minsheng Bank (principal sponsor), Harbin Bank and Baoshang Bank in April 2012. “The idea of the association originated from two considerations. One is from the enlightenment of European Union’s (EU) establishment and development; another is from the development experience of China Minsheng Bank,” Guo said.
The association was designed to help smaller financial institutions gain a fairer and more competitive footing in the SME lending industry. All three banks are focused on supporting small businesses, with China Minsheng Bank the biggest SME financial lender among the three, while Harbin Bank and Baoshang Bank are both provincial banks dealing in in small and microfinance loans. Harbin Bank’s microfinance business accounts for over 60% of all loans issued.
In comparison with China’s Big Four banks, namely Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China, which account for over 60% of total domestic banking assets, small and medium-sized banks in the country possess limited funds and resources, and are generally ill equipped to deal with myriad of risks encountered in the industry.
China’s Big Four banks account for more than 60% of total assets in domestic banking industry
Figure 1. Big Four’s market share in total assets among 17 listed banks in China
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Capital & Strategic Issues, China, Retail Banking, Risk and Regulation, SME Banking, SME BankingKeywords:AFCA, Guo Zhiwen, Harbin Bank, China Minsheng Bank, Baoshang Bank, Kasikornbank, Hana Bank, Bank Of East Asia, Chinatrust Commercial Bank