At the same time international financial colossus Citigroup is cutting global multi-million dollar deals, it is helping change China - one poor farmer at a time.

Its method: providing grant money to lift people's lives through microfinance loans.

Last year, the firm gave US$1.3 million to the Grameen Trust, the organization that has introduced microfinancing as a funding model to China and manages donated funds to finance loans for the poor.

Now about US$505,000 of the Citigroup donation has been provided as seed capital and start-up funds for four poverty-relief co-operatives in Hebei, Jiangxi and Sichuan provinces and to the Inner Mongolia Automonous Region. Each of the group can then directly lend the funds to local farmers, Citigroup officials said.

The projects are expected to provide microfinance loans to more than 3,000 farmers in the various regions during the next two years.

Microfinancing refers to small-volume financing to small-scale start-up projects. Such financing has been applied to poverty-relief projects in China and has assisted many people, especially women, in poorer areas to start individual businesses and improve their living standards, said Du Xiaoshan, deputy director of the Agricultural Development Research Institute of Chinese Academy of Social Sciences.

Though the volume of microfinance loans are very small, normally rangeing between US$120-US$400, they do have "a real impact in changing people's lives," said Richard Stanley, a Citigroup spokesman, at a press briefing yesterday in Beijing.

Yao Guiqin, a farmer in Chifeng, Inner Mongolia, for example, lives an entirely different life on the microloans she received.

Yao said she first started trading farm products on the 1,000 yuan (US$120) she borrowed from her local microfinance project management agency in 2000.

She was able to triple her income, and gradually expanded her business and borrowed even more.

A survey into the livelihood of the microloan users has found that most of them improved their living conditions and enhanced their lives, while greatly increasing their confidence.

(HK Edition 09/23/2003 page7)