A recent pioneering initiative in inclusive finance has been implemented deep within the Ulan Buh Desert in Inner Mongolia by CBHB (HKEX: 09668). This initiative addresses the long-standing challenge faced by upstream farmers supplying the national agricultural leader, Shengmu Forage, who have struggled with securing loans due to a lack of traditional collateral.
Moving away from conventional reliance on hard assets like property, the bank has pioneered a novel "bank credit + core enterprise guarantee + farmer funding" chain financing model. This approach channels financial resources directly into desert ecological management and the organic industry supply chain. From January to May 2026, CBHB has disbursed over 45.37 million yuan in loans to farmers, effectively supporting an ecological restoration project that has transformed 200 square kilometers of desert into oasis. This initiative has created a replicable model of "industry chain + finance" collaboration.
This financing model not only resolves the cyclical funding challenges—characterized by short-term, small-scale, frequent, and urgent needs—faced by farmers but also establishes a robust safety net through a three-dimensional risk control system. It achieves synergistic growth in ecological, economic, and social benefits, providing a tangible blueprint for financial institutions to support rural revitalization and green development.
Targeted Financial Support Unblocks Funding Channels
On the edge of the Ulan Buh Desert in northern China, a 200-square-kilometer oasis stands as a testament to a remarkable transformation. Over fifteen years, Shengmu Forage turned desert into organic pasture, establishing a "grass-livestock-manure-field-grass" organic cycle system, recognized in 2025 for its green development practices. However, upstream farmers, lacking effective collateral and facing limited financing options, were constrained by persistent cash flow pressures, which hindered stable expansion of the supply chain.
Through extensive field research, CBHB developed a dedicated credit product for these farmers. The model does not require government credit enhancement or hard collateral like property from the farmers. Instead, it establishes a dynamic "whitelist" based on historical cooperation data with the core enterprise Shengmu Forage, land management status, and individual credit profiles of the farmers.
Loan funds are designated for land rent payments and agricultural input purchases, with payments made directly to counterparties via entrusted payment to ensure precise allocation and proper use of funds. Bank managers collect applications on-site, verifying planting area and soil moisture, allowing farmers to complete the entire application, approval, and disbursement process without leaving their homes.
The loan terms are closely aligned with the forage grass growth cycle, and repayment schedules are synchronized with income from grass sales, effectively alleviating the periodic repayment pressure from concentrated upfront investments.
Operationally, CBHB established a streamlined mechanism involving leadership coordination and multi-department collaboration, opening a green channel for approvals. By adopting a "wholesale + retail" service model, the bank meets the overall supply chain needs of the core enterprise while flexibly responding to the urgent funding timelines of numerous farmers, achieving genuine efficiency and convenience.
Comprehensive Risk Management Ensures Long-Term Sustainability
While enhancing financing accessibility, CBHB has constructed a three-dimensional risk control framework comprising a "customer whitelist + core enterprise guarantee + full-process fund supervision" to ensure the sustainable development of this inclusive finance program.
The core enterprise, Shengmu Forage, provides joint liability guarantees for the upstream farmers, extending its core supply chain credit to the end of the chain. The bank implements closed-loop management of information, capital, and logistics by dynamically monitoring farmers' planting records, land lease contract fulfillment, and Shengmu Forage's purchase data.
After loan disbursement, funds are managed through dedicated, closed accounts. Upon repayment, Shengmu Forage assists in deducting principal and interest, significantly reducing post-loan management costs and default probabilities.
This stable triangular structure—where the core enterprise assumes risk, the bank manages funds, and farmers focus on production—safeguards the bank's credit security while incentivizing farmers to value their credit records, creating a virtuous cycle.
The impact of this model extends beyond financial metrics. The stable capital supply has enabled Shengmu Forage to expand its organic forage cultivation, further solidifying desert ecological restoration and promoting a positive cycle of "ecological restoration—industrial development—farmer prosperity."
Former herders and farmers in the desert region have transitioned into industrial workers, with per capita incomes steadily rising, achieving a triple-win outcome of "desert greening, enterprise efficiency gains, and farmer income growth."
CBHB is now using this collaboration as a template to replicate and extend its "chain-based inclusive finance" experience to more specialized agricultural and pastoral scenarios. The bank continues to optimize its credit models and operational processes, aiming to enhance service coverage and satisfaction around critical farming seasons like spring planting and autumn harvest, contributing more robust financial strength to rural revitalization and the building of a "Beautiful China."
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