A major financial player – Nonglian Zhongxin Technology Co. – has stepped up to serve China’s chronically underserved rural sector with insurance.
Ant Financial, an affiliate of the Alibaba Group, has a 40 percent stake in Nonglian Zhongxin Technology Co., alongside majority shareholder China Insurance, a Beijing-based insurer with rural roots.
A lack of insurance has been a big stumbling block in the modernization of China’s aquaculture industry, particularly as the country’s socialist land-trading system is gradually being dismantled to allow trading of land rights by smallholders.
According to official data, one-third of 230 million rural households in China had transferred their land rights as of June 2016, with most of the land being taken on long-term leases by market-focused agricultural cooperatives and corporates producing larger volumes to meet rising domestic demand.
Previously, the highly fragmented nature of land holdings scared off potential insurers, especially for small-time farmers. A lack of insurance of pond stocks, in turn, is a major reason behind the comparative dearth of credit offered by banks to aquaculture businesses, which in turn has held back expansion and professionalism in the sector.
