Grameen Partners with Chinese Online Retailer to Scale Up its Microfinance Efforts

Grameen’s ongoing expansion in China may have some people wondering what the microcredit bank is doing in a nation that recently overtook the United States as the world's largest economy. The short answer is pretty simple—over 120 million people continue to live below the poverty level and the per capita GDP sits at a little over $6,000. For comparison, that’s lower than the per capita GDPs of Botswana ($7,238), and Iraq ($6,455).

It's stats like these that make us wonder why more funders aren't focused on China, although it's not like China gets completely ignored, as we've discussed herehere, and here. Environmental funders are especially attuned to China, and corporate funders with large operations in China are often quite attuned to the country. 

For anti-poverty funders, there's no shortage of low-hanging fruit. The per capita GDP is lopsided between rural and urban populations, with urban dwellers out-earning rural residents by around 3.3 to 1. That income gap is what Grameen and JD.com, China’s largest online direct sales company, are aiming to close.

Initially, Grameen will put JD.com’s crowdfunding platform to work, using it to raise the money it needs to establish Grameen’s ground operations. Crowdfunding will also likely be used down the road to provide microloans to rural residents across China.

Grameen has had a presence in China since 2009, when it paired up with the global e-commerce company Alibaba Group, which donated $5 million help launch the Grameen China initiative. The primary regions of focus for the initiative were the Sichuan province and Inner Mongolia, with expansion planned down the road. Since then, Grameen China has been sussing out regulatory issues and the related red tape toward launching its main business of providing micro-loans to poor people and banking services to those that have generally been overlooked or excluded by traditional banking institutions.

It took a couple of years, but in 2014, the microfinance institution officially opened its first office in Xuzhou, Jiangsu Province. The initial focus was empowering women living in rural China, by encouraging them to build small businesses through the help of microloans provided by Grameen.

Partnering with JD.com seems to be a good fit for the microcredit organization. Earlier this year, JD.com launched its own crowdfunded microfinance project by providing small loans to couriers, who used the funds to establish and operate delivery stations for the online retailer.

It seems like Grameen is always expanding, in all ways. Grameen America opened its doors in New York in 2008 and IP recently covered it expansion into LA County. As the Grameen continues its march toward lifting more people out of poverty, it also looks as though it may be keeping a close watch on income gaps, especially in developed nations. 

Related: