HSBC and Women's World Banking Partner to Provide Financing to Rural China

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Partnership will develop financial products and services designed to expand HSBC's financing capabilities to China's rural communities

We are very pleased to be able to extend our financial services to farmers and small rural businesses in China through the launch of the individual lending product. As the first international bank to enter the country's rural market, HSBC is leveraging its international experience and partnerships to tailor suitable products and services for rural communities in China.

The Hongkong and Shanghai Banking Corporation Limited, in partnership with Women's World Banking (WWB), one of the largest networks of microfinance institutions and banks, today announced the successful launch of a new "individual lending" product, an unsecured small business loan tailored to meet the financing needs of farmers and small businesses in rural China.

WWB is providing technical support to HSBC, training local staff in managing and servicing a portfolio of farmers and small businesses, and creating tailored financial products and services to address the specific needs of the country's rural areas. HSBC partnered with WWB to tap the organization's 30 years of experience in assessing local market conditions, designing financial products with low-income clients in mind and assisting financial service providers in expanding their rural franchises.

The new loan product has been piloted over the past three months at Hubei Suizhou Cengdu HSBC Rural Bank, HSBC's first rural bank, which opened in December 2007. The product has since been launched at a second HSBC rural bank in Chongqing Dazu, with plans to roll the product out across all HSBC rural banks. As commercial operations, HSBC's rural banks aim to be viable, profitable and sustainable businesses, while meeting the needs of China's rural communities.

Vincent Cheng, Chairman of The Hongkong and Shanghai Banking Corporation Limited, said: "We are very pleased to be able to extend our financial services to farmers and small rural businesses in China through the launch of the individual lending product. As the first international bank to enter the country's rural market, HSBC is leveraging its international experience and partnerships to tailor suitable products and services for rural communities in China."

"Expanding access to financial services for those who live in rural areas is vital to supporting rural economic development in China as well as empowering farmers to increase their productivity and ability to generate income," said Mary Ellen Iskenderian, president and CEO of Women's World Banking. "WWB has brought our international experience in designing innovative financial products and services to China and has welcomed the opportunity to support HSBC's rural banking services on this initiative."

Rural households and individuals, especially those dependent on agriculture, experience variable cash flows due to the seasonality of their businesses and production. This issue, along with a lack of traditional forms of collateral, is a barrier that impedes many farmers and small businesses from obtaining financing. The new individual lending product relies on an analysis of an applicant's business and cash flow, whereby the financial needs and repayment capacity of the client are considered when structuring the loan.

Liu Mingjiu, a small hog raiser in Suizhou, commented: "This product is extremely helpful to individual farmers who do not have access to collateral or relationships with a big corporation that can guarantee a loan." Li Mingkun, a local entrepreneur selling solar thermal energy water heaters to farmers, added: "HSBC was the first bank to take consideration of my needs, developing a product with a repayment structure that fits my cash flow and will allow my business to prosper."

About Women's World Banking (WWB)
WWB is a leading global network of 40 microfinance providers and banks, working in 28 countries to bring financial products and services to low-income entrepreneurs, especially women. The network is supported by an international team of experts based in New York who deliver expertise in product design and distribution, access to capital markets, and customer care and insight. The network serves over 20 million micro-entrepreneurs. For more information on WWB, please visit its website at http://www.womensworldbanking.org.

About HSBC

1. HSBC Rural Bank
HSBC was the first international bank to enter China's rural market and now has five rural banks in operation. In December 2007, Hubei Suizhou Cengdu HSBC Rural Bank Company Limited was established as a wholly owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited. Chongqing Dazu HSBC Rural Bank Company Limited opened for business in September 2008, one month after which Fujian Yongan HSBC Rural Bank Company Limited began operations. In December 2008, Beijing Miyun HSBC Rural Bank Company Limited opened for business and thereafter, in January 2009, Guangdong Enping HSBC Rural Bank.
http://www.hsbc.com

2. The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which, with around 8,500 offices in 86 countries and territories and assets of US$2,422 billion at 30 June 2009, is one of the world's largest banking and financial services organisations.

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Dan Dan Chang
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