Grameen Foundation, a Washington, DC-based non-profit organisation dedicated to providing small loans to poor people, is forming a partnership with a mainland counterpart to bring microfinance to China's vast rural areas. The partnership comes as millions of underprivileged farmers and underdeveloped small businesses grapple with regulatory and technical hurdles in securing much-needed loans. A landmark joint venture, YouChange Purong, was set up by Grameen and the China Social Entrepreneurship Foundation yesterday. It will provide funding, technology and training to the country's small-loan firms. Under the agreement, the US organisation will act as an adviser to the venture. Jennifer Meehan, Grameen's Asia regional chief executive, envisioned financing of 200 million to 300 million yuan (HK$230 million to HK$345 million) in two years after the joint venture demonstrates a successful operation model. It is the first company of its kind on the mainland that supports the growth of China's more than 1,300 small-loan firms. Grameen chief executive Alex Counts said China would become a world leader in microfinance, while the landmark deal meant the country was 'getting close' to the prospect. At present Chinese farmers can borrow money from commercial banks, rural credit co-operatives and small-loan firms, which cannot take deposits. Cash-hungry individuals and small businesses face difficulty in securing bank loans because the lenders require collateral. The China Banking Regulatory Commission liberalised the rural banking sector at the end of 2006. It allowed financial institutions to set up village banks and small-loan firms to boost lending to small businesses and individuals. Grameen will offer its management systems to mainland institutions dealing with rural finance, enabling them to lower operational costs and better assess the financial conditions of borrowers. 'YouChange Purong is certain to lay a solid foundation for future development of China's rural finance,' said Zhang Kaiyong, president of Credit Orienwise, the mainland's largest privately owned credit guarantee firm. Grameen's mission is to empower the world's poorest people to lift themselves out of poverty with dignity through access to financial services and information. The organisation, founded in 1997, uses the income from the microfinance business to further help poor people around the world gain access to small loans.