New financial assistance program aimed at residents who live on less than $1.25 a day

Sichuan province is pledging to lift 5 million residents living on less than $1.25 a day out of poverty by 2020 by replacing direct assistance with a loan program to help villagers in the remote mountains and nomads on the grasslands start their own businesses.

The provincial authority implemented the new financial assistance program in July 2014, creating a special fund that serves as collateral for interest-free and low-interest loans. Township governments are responsible for helping borrowers choose appropriate businesses.

Daocheng county, in the province's Ganzi Tibetan autonomous prefecture, has snow-capped mountains and plateau grasslands. Tourists have begun visiting its remote villages in greater numbers over the past decade, creating new opportunities.

In the county's Yading village, 150 residents once faced acute poverty, and it was jokingly dubbed a place where even hares were reluctant to settle. But that's changing.

"Many of the male villagers remained single all their lives, because few women would marry and move to the destitute village," said Geldol, 50, a Tibetan family inn owner in Rencun village near Yading.

Now Yading village is the most prosperous place in the county, Geldol said, and a family can make about 300,000 yuan ($50,000) a year from housing rentals alone. The township government helped Geldol obtain a 500,000 yuan interest-free loan in 2003 as part of an earlier pilot loan project. He built a 44-room, four-story hotel.

"I paid off the loan in three years, and rented the building to professional hotel managers 10 years ago," Geldol said.

Zeng Guanhe, head of Daocheng county, which counts tourism and wild mushroom processing among its main industries, said the government also is changing the mechanism by which it judges the nomads' financial situations. Currently, it considers the number of yaks they own.

"We will issue the farmers and nomads ownership certificates for their grassland, forests and houses. They can soon mortgage these properties to the banks," Zeng said.

Gala town in Yajiang county, cited as another success story, has one of the largest agricultural cooperatives in Ganzi, producing tons of matsutake mushrooms, plateau pigs and herbal medicine. More than 200 families take part in the co-op, which receives a direct government subsidy and low-interest bank loans, co-op manager Phujadrup said.

Keryon Tashi, a 44-year-old family inn manger in Riji village, not far from the agricultural co-op, is another beneficiary of an earlier poverty-alleviation loan. His family and another 12 neighbors received 200,000 yuan each in government subsidies, and three-year, interest-free loans of 100,000 yuan from the banks, to transform their homes into hotels.

"The officials and bank staff believe we can make a good living by serving tourists, apart from yaks," he said.

He supports three daughters who attend college, appreciating what they learn there. "Knowledge is the permanent bank in their brains that benefits them all their lives," he said.