Challenges
Due to a high volume of non-performing loans, many of the RCCs are technically insolvent. Since 1998, central banking authorities have injected approximately US$4 billion into recapitalization the RCCs, and have considered other measures for improving the performance of the RCCs.
Although the RCCs are gradually being transformed into independent commercial banks (RCBs), they are still not immune from government requests to make policy loans (loans issued for political reasons, such as the desire to support certain politically important industries or firms, rather than because the firm is an attractive candidate for a loan).
Read more about this topic: Rural Credit Cooperatives
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