By Yu Lin (Winter/Spring 2010 Intern)

I applied for the PlaNet Finance China (PFC) internship with an expectation of getting practical experience in the field of microfinance, gaining knowledge of the operation mechanism of Microfinance Institutions (MFIs) in China, and how to evaluate and research on the performance of MFIs as well. In conjunction with my internship, I was writing my thesis on implementing structured products in Microfinance, which was the motivation for me to gain a deep understanding of the Chinese market. This internship marked my first step towards a career in microfinance.

During my internship, I was responsible for the following activities:

• Translation between English and Chinese for articles and project reports.
• Research on a variety of topics including microfinance and development work in China. One of my first research assignments was on the micro-insurance industry in China; this offered me insight into a developing sub-field of microfinance. Initial research indicated that some of the biggest Chinese insurance companies have created products which cater specifically to the needs of farmers. However further research by calling subsidiary customer offices in smaller city-townships revealed that the practical implementation and dissemination efforts of these products were insufficient. For example, branches in Sichuan and Shaanxi provinces of a well-known insurance company had yet to provide microinsurance products to households and clients in their jurisdiction.
• Analyzing and consolidating MFI financials for PFC’s Country Note report. The mission statement of PlaNet Finance is “accelerating poverty alleviation through support to the microfinance sector”; as such, the Country Note is an important tool as an overview of the microfinance industry and the performance of local MFIs. Having a finance background, my task was to collect the financial statements and business report from various MFIs and subsequently calculate and assess relevant indicators such as percentage of non-performing loans, debt-to-equity ratio etc.
• Another task that I was assigned to involved maintaining communication between existing and potential partners through email and phone calls. During my internship, PFC was just ending the Tongwei I project; which uses microfinance to promote and push for renewable energy technology in the form of biogas facilities in individual households throughout Gansu province. [For more information, see Tongwei I] In order to understand the impact at the household-level, I was given the honor of calling two MFI clients; Mr. Chen Yongwei and Mrs. Ma Xiaoping from Zhaohe village. My questions revolved around aspects such as the benefits to crop output after adopting biogas technology in their households and if any extra income was generated in selling excess crop from the biogas systems. When I called Mr. Chen, he was nice and eager to share with me the benefits of the biogas facilities and the increasing output and farming area of his crop. The great news was that he began to plant grains which were impossible prior to installing the biogas facilities due to the infertility of the land; moreover, the drastic improvements to soil fertility directly enhanced the quality and quantity of his crops. His voice exuded a sense of happiness and excitement which in turn affected me. As our conversation ended with a positive note, I became excited that the farmers’ lives were so positively affected. With this confidence and excitement, I called Mrs. Ma, armed with the same questions. At first she was hesitant and wasn’t sure whether she should talk to me, but after calling some relatives, she called me back and supplied me with all the information I needed, demonstrating great cooperation. Similar to Mr Chen, her family’s living conditions improved after installing biogas technology in their household. She also said as the conditions of the soil improved, she would conduct a variety of improvements to reach a higher output. I was greatly touched by talking with these two microfinance clients and to witness their happiness. I cannot help but wish them a great harvest and prosperity in the future.

The staff at PlaNet Finance China was very nice and great in teamwork. We learned collectively, communicated and developed a friendly relationship. I really benefitted a lot in this two-month intern experience where I realized the vital role government and policy play in the regulation and transformation of MFIs which will affect their ability to enlarge microcredit. CDOs are not really the defining issue to bridging the poverty gap at the moment, rather what is more important is the microfinance expertise to help MFIs develop sustainably and reach out to the “base of the pyramid”. Thanks to this experience, I found the practical information and knowledge pertaining to the MF industry here in China. Therefore, upon graduation, I would like to continue learning and understanding about MFIs and gain further knowledge on their status quo and development in China. I was very satisfied with my internship and working with people at the PFC office. I’ll keep in touch with them and hopefully contribute more to their efforts in the future.

If you are interested in learning more about internship opportunities here at the PlaNet Finance China office, please visit our Get Involved section of the website.