Opinion | Reform effort reflected in US listing of microlender China Commercial Credit

No one can accuse the People's Bank of China, the country's central bank, of being gun-shy about reform.

A big step in the reform of the nation's finance sector under the PBOC came with the listing on the Nasdaq in the United States last week of China Commercial Credit (CCC), a little-known microcredit firm that makes loans to small firms and farmers in Jiangsu province.

Run by former central banker Qin Huichun, the listing raised US$89 million and, on the first day of trading, the stock closed at US$6.39, down from its issue price of US$6.50.

Hardly a stellar beginning, but Qin, who worked at the central bank's Suzhou branch from 1981 to 2008 and served as a deputy director at the State Administration of Foreign Exchange's Jiangsu branch between 2006 and 2008, now has his eyes on acquiring a US bank.

There are about 5,600 microcredit companies in China with total outstanding loans as of September last year of more than US$80 billion, according to CCC's listing document, which cited PBOC research.

The purpose of the capital raising was simple. The company wanted to boost its balance sheet and strengthen its lending capability.