Social organizations face qualification difficulties in obtaining loans, and a hundred billion-dollar inclusive finance market is waiting to be activated

Over the years, social organizations in China have developed rapidly and have become an important force in social construction and livelihood security.

As of the end of 2024, the total number of social organizations nationwide has reached 871,800, employing over 11 million people. They are playing important roles in poverty alleviation, education, elderly care, environmental protection, rural revita

However, the healthy development of this "people's livelihood force" is facing the realistic bottleneck of a single source of funding: recently, the "Social Organization Loan Status, Demand and Bank Loan Accessibility Evaluation Report" (hereinafter

In recent years, due to factors such as the economic environment, fluctuating donation willingness, and government funding cycles, the issue of tight funding has become increasingly prominent. More and more social organizations have fallen into the d

Experts and scholars have analyzed and pointed out that although bank loans are an important financial support for the operation and development of individuals and institutions, they have not been fully opened to social organizations. If we can exten

Social organizations frequently encounter financing bottlenecks, and loan status is the biggest obstacle.

The two-year nationwide survey covering 28 provinces and 213 social organizations shows that 45.54% of the organizations have clear borrowing needs. These needs mainly focus on three aspects: delays in government project funding, temporary income and

According to the report, in terms of loan demand size, nearly 90% of social organizations have an annual loan demand of less than 1 million yuan, and over 90% of these organizations can bear an annual interest rate of 5% and below. Additionally, loan

Zhou Ling introduced a typical case to the reporter from 21st Century Business Review: a social worker organization in Xiamen with more than a hundred full-time employees and an annual project fund of over ten million yuan faces a constant liquidity

Li Guowu, the director of the Financial Social Work Committee of the China Social Work Education Association, analyzed that the loan demand of social organizations is largely a product of insufficient liquidity caused by mismatch of funds in time. Go

Despite clear demand, the actual loan approval rate for social organizations is low. Reports show that only 32.86% of organizations have successfully obtained loans, with 75.71% of them relying on personal credit loans from founders or legal represen

After being refused loans by banks, 97% of social organizations were forced to choose "curve saving the country"-having their founders or legal persons handle personal loans, or maintaining operations by reducing institutional expenses and suspending

"Loan qualification issues have become the biggest 'obstacle' to social organizations obtaining loans." Zhou Ling emphasized that more than 40% of the organizations that have been denied loans have been rejected due to 'non-compliance with social org

Unclear loan qualifications and lack of evaluations leave banks in a dilemma of 'not daring to lend'.

Why do social organizations' loans fall into the dilemma of "great demand but low loan approval"?

From a policy perspective, China's current Loan Rules were issued in 1996 and did not explicitly list social organizations as loan targets. Although the Administrative Measures on Working Capital Loans issued by the State Administration of Financial

Although the policy has opened the door, there are no implementation details, so the banks have no basis for operation., said Li Guowu.

The cognitive bias towards the non-profit nature of social organizations has also intensified the difficulty of policy implementation. Zhou Ling explained to a reporter from the 21st Century Business Review that the core of the non-profit nature of s

In addition to the unclear loan qualification, there are also significant shortcomings in the credit evaluation system of social organizations. Currently, the evaluation of social organizations by civil affairs departments mainly focuses on complianc

The research data intuitively reflects the risk control concerns of banks: Among the 19 banks interviewed by the research team, 5 banks directly rejected the loan application with the reason of no relevant products or social organizations having no l

The person in charge of loan business approval at a joint-stock bank stated frankly that there were certain deviations in the bank's cognition of social organizations in the past. “When it comes to large foundations like the China Charity Federation,

When it comes to risk control, the person in charge pointed out that "banks need to be responsible for shareholders and state assets. Although the income from small loan business is limited, the potential risks are not low." He said that banks are no

Hundreds of billions of special benefit and public interest loan market waiting to be activated

Social organizations in China are gestating a large credit demand market. According to the analysis of the report, 70% of social organizations with borrowing needs have an annual loan requirement of less than 1 million yuan, of which 68.04% demand lo

Currently, this one trillion market of inclusive public welfare is waiting to be activated.

In an interview with the 21st Century Business Herald, Zhou Ling said that only a few regions had conducted pilot explorations previously. "Shenzhen, about ten years ago, had begun to provide banks with credit products targeted at social organization

During our research, we found that, when facing this potential market, banks are generally open and expectant towards it. However, they also commonly reflected that the current policies are not clear enough, there is a lack of ready-made products and

From the perspective of the overall development of inclusive finance, Liu Chengqing, deputy director of the Small Enterprise Finance Research Center at Shanghai University of Finance and Business, pointed out that inclusive finance has been promoted