This is a blog about microfinancing trend, practice and resources in China. I am currently volunteering for Wokai, a financing institute for MFI orgnaizations in China. This is a journal of my work.

Tuesday, April 7, 2009

The Government-Run Labor Union Explores Micro-finance

As the global economy turning sour, many laborers lost their job in factories and have to return home. In Chinese media, there have been discussions on whether those laborers deserve some kind of welfare benefit, such as unemployment or severance.

Right now, their status falls through the social safety net: their residence status say they are peasants, or 农村户口,and they are likely back in the countryside already. Therefore, their old employers, and the government(s) in the city or province where they used to work, are reluctant to sign on to some kind of compensatory plan. Yet the local governments in rural areas mostly don't have the resources to help them either.

In the context, there's been reports (e.g. 工会将开展小额贷款担保试点帮助农民工创业) recently that the government-run Labor Union will start pilot programs where the Union will offer guarantee on small loans for enterprising former laborers now back home.

Whether the Union is qualified to play such a role is uncertain. However, I have no doubt this is a worthwhile experiment.

Here is an excerpt from the article:
针对金融危机中受到影响的农民工,全总将从5亿元中央财政困难职工帮扶专项资金中拿出一定比例,用于农民工就业援助和帮扶服务,并要求各地方工会也要加大投入,相应配套资金用于农民工援助行动

1 comment:

Bing Wu said...

My thoughts:
1. This article is pretty typical of Chinese journalism--lack of detail! "一定比例"? How much? For how long?
2. What the article did not mention, is that in the same meeting when this announcement was made, the Union boss made the following statement: "We need to work hard and raise our alert level so that domestic and foreign enemies cannot take advantage of the economic situation". That tells a lot of the motivation behind this decision, doesn't it?

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This is a blog about microfinancing trend, practice and resources in China. I am currently volunteering for Wokai, a financing institute for MFI orgnaizations in China. This is a journal of my work.