Looking at the piles of snow-white cotton harvested from his 18 mu (1.2 hectares) of fields, Niyazi could not help grinning. The 40-year-old farmer from northwest China's Xinjiang Uygur Autonomous Region will have a bumper harvest and a gleam of hope for a better life this year.

"I owe all this to the new rural credit system," said Niyazi.

Niyazi, a father of two school children from Xiaoyiluke Village, Xinhe County, Akesu Prefecture, was the support of a poor family. There was no way out when it came to the spring plowing season this year.

He netted 7,000 yuan (US$1,023) from his cotton crop last year. But this spring, he needed that exact amount for seeds, fertilizers and plastic film for water-saving irrigation. To live or to plow, became the question.

There were banks around. But Niyazi had no collateral or guarantors. "Aizezi came forth" when I was at a dead end, said Niyazi.

His savior, Aizezi, who worked at the local rural credit cooperative, came with a hammer and nailed a red iron slate on Niyazi's door.

Under a rural credit scheme that took effect in mid-2007 in Xinjiang, that slate, along with a little red book that was actually a loan certificate, meant that Niyazi would be able to borrow up to 10,000 yuan from the co-op.

Rural credit co-ops have functioned in China for decades as a major means of financing for local farmers. The one that helped Niyazi is the Xinhe Rural Credit Co-operative, which was formed with the support of local village heads.

It evaluates creditworthiness based on farmers' previous loan records (if any), farming activities and record of obeying the law. It doesn't ask for collateral or guarantors.

"We decided our mission was to elevate the credit standing of farmers by improving our small loan service," said Abudu, director of the Xinjiang Rural Credit Co-operative Alliance, of the alliance's formation.

By the end of 2007, about 91 percent of the farmers in Xinhe County, or 23,900 households, had credit files that divide them into three categories depending on how much they can borrow: 10,000 yuan, 20,000 yuan and 30,000 yuan. For this purpose, the co-op set aside 269 million yuan for loans.

"The little red book doesn't weigh much, but it's a life-saver to me," said Niyazi, who quickly got his loan.

In Xinjiang, as in other parts of China, many farmers can't get loans.

"With loans, they might use their farms to build a better life. Without them, they will continue struggling under the poverty line," said Gong Weibin, a professor at the China National School of Administration.

(Shanghai Daily September 2, 2008)