“We're not financial organisations!”: Financial innovation without regulation in China's rural cooperative funds

This study is based on a detailed survey of a township-based RCF in Jiangsu Province of China undertaken by the first author in 1997. RCFs are well developed in Jiangsu. In terms of organisational structure, this RCF is typical of RCFs in Jiangsu and nearby regions of China. This RCF is, however, one of the best managed in Jiangsu province with a strong financial position. The study is supplemented by data collected from other field work in China. Recent developments in China's rural financial markets and institutions are documented in Section 2. Section 2 also reviews the emergence and development of the RCFs in Jiangsu. The innovations in lending methodologies introduced by the case-study RCF in Jiangsu are examined in Section 3. Section 4 discusses the regulation and supervision of the case-study RCFs. Conclusions and policy implications are drawn in Section 5.Cheng, Enjiang; Findlay, Christopher Charles; Watson, Andre