It is hard to imagine the existence of the Association for the Rural Development of Yilong County without its secretary-general, Gao Xiangjun 高向军. As one of the first social entrepreneurs in China, she has been navigating uncharted territory since the earliest days when such activities were even possible. The success of the association up to this point is a testament to her persistence, creativity, and passion for helping her home province.
Mrs. Gao, a native of Yilong County, spent most of her career working as a government official. In 1992 she made her first entrepreneurial endeavor, opening a small grocery store to supplement her income as a local government official, which at that time did not exceed 50 RMB a month.
China first started accepting investments from foreign NGO’s in 1987, about a decade after the original start of the Open and Reform movement that spurred the development of a market economy and foreign trade.
Gao travelled to Beijing for the first time in 1995 on her own initiative in an attempt to raise money for a local development project. She spent her own savings to buy the train ticket, despite the high cost and no guarantee of success. Gao chuckled as she recounted the first time she entered the UNDP office to apply for funding. “I was so pretty at that time…I remember the first time I walked into that office, all of their eyes lit up!” She secured 8 million RMB (about 1 million USD) in funding for development projects in the county. Out of this overall grant, 400,000 RMB was set aside for a pilot microfinance project, and it was out of this funding that ARDY was founded.
In her first microfinance initiative Gao closely followed the original model laid out by Mohammed Yunus, the Nobel Prize-winning originator of microfinance. Loans were granted to groups of five borrowers, who were collectively held responsible for the payments of the group. In 2003, however, the program ran into serious problems. Borrowers took advantage of the group model to miss payments, and a lack of accurate, rigorous financial record keeping threatened to bankrupt the association. Gao directed a complete reassessment of the program to figure out the source of the failure. In 2004, the program was launched again with a new plan of operation. Financial records were much more rigorous, and the system for evaluating loan candidates was overhauled. The group model was also abandoned in favor of loans to individual families.
In 2008, the burgeoning success of the new model was threatened again when Gao contracted cancer. She spent a year in Beijing, undergoing treatment at one of the best hospitals in the country. “Everything was so uncertain then, we didn’t know if she was going to recover or what would happen,” said Li Shibing 李世冰, the organization’s assistant director. Her cancer is currently in remission, though Gao often only works half-days in the office as part of a continued rest regimen.
Despite this challenge, the organization has experienced a period of uninterrupted growth since its lending and oversight practices were re-tooled six years ago. It now works with a yearly lending pool of over 10 million RMB, and has reached more than 3,000 families in Yilong county. Adding in the roughly 2,000 households that have been incorporated into rural cooperatives throughout the county, ARDY reaches roughly 5000 families each year. The program has been so successful, in fact, that the Chinese government has begun using ARDY as a model for promoting both microfinance and grassroots organizing initiatives in other parts of the country.
“I have always been an enterprising person,” Gao mused as she told me the story of ARDY’s origins, “it’s because my family is originally from Shanxi, Shanxi people have enterprising personalities.” She was successful, she explained, because “I was always willing to expose myself to new things, to new ideas, to observe and learn from the success of others. As a public official, one sees problems all of the time, but I was one of the few who knew how to look beyond my surroundings for solutions.”
In the main meeting room of the ARDY headquarters hangs a photograph of Gao smiling alongside Muhammed Yunus, taken at a conference in Bangladesh in 2002. The two of them first met when Gao travelled to Bangladesh to observe Grameen Bank, the first successful microfinance firm, in 1996.