China's rural co-operative financial institutions reported loan growth of 20 per cent last year, faster than the average of 15 per cent in the country's banking sector, amid the government's push to develop banking services in the countryside. Rural co-operatives had outstanding loans of 2.6 trillion yuan last year, 20 per cent more than in 2005, Tang Shuangning, a vice-chairman of the China Banking Regulatory Commission, said in a statement on its website yesterday. Those loans included 1.2 trillion yuan to agricultural industries, up 15 per cent, and 920 billion yuan, or 23 per cent more, to farmers, Mr Tang said. The CBRC has made the development of a rural financial system a priority on its agenda as the government hopes to lift the economy in those poor regions in line with the country's fast growth by 2010. Mr Tang said the regulator would restructure rural co-operatives into modern financial shareholding companies in five to 10 years. He also said that the CBRC would introduce nine financing channels to serve the rural sector, involving the Agricultural Bank of China, the mainland's fourth-largest commercial lender, and the policy lender, Agricultural Development Bank of China. Agricultural Bank would mainly serve districts designated as 'xiang' level, which are between cities and villages, he said. Agricultural Development Bank, one of the three policy banks, would assume the role of setting up basic infrastructure facilities and financing seed-related businesses in poor rural areas. The CBRC is also hoping to attract domestic and foreign lenders to help develop the less-developed banking sectors in rural areas by such means as setting up more branches. HSBC, Standard Chartered and Grameen Trust, led by Nobel peace prize winner Muhammad Yunus, hoped to set up outlets in rural regions, while seven domestic banks including China Minsheng Banking Corp, Beijing Rural Commercial Bank and Tianjin Rural Co-operative Bank applied for the move, the regulator said earlier. Postal Savings Bank, China's fifth-largest lender that only provides deposit services at present, has been asked by the government to focus its future loan services in rural areas. The regulator will also support private capital to set up village banks.