As a practitioner in the rural credit system, I am particularly focused on the risk resolution and the strategy of "reducing quantity while improving quality" for small and medium financial institutions. In my view, "reducing quantity" refers to clearing out risks, rather than simply making institutions "disappear." Where is the reform of small and medium financial institutions headed during the "15th Five-Year Plan" period?

The reform and risk mitigation of local small and medium financial institutions have been key priorities in the financial sector over the past three years, with efforts continuously intensifying. Recently, at an economic-themed press conference during the Fourth Session of the 14th National People's Congress, People's Bank of China Governor Pan Gongsheng summarized the progress in orderly resolving financial risks in key areas. The PBOC has supported and coordinated with financial regulatory authorities and local governments, employing a combination of online restoration, mergers, reorganizations, and market exits to advance the reform and risk mitigation of small and medium financial institutions. The number of high-risk small and medium financial institutions has been halved from its peak.

Over the past year, "disappearance" has become a frequent term in discussions about local small and medium banks, reflecting the accelerated pace of mergers and reorganizations. According to the National Financial Regulatory Administration's financial license information system, 310 village and township banks exited the market in 2025, along with 160 rural commercial banks, and over 100 rural credit cooperatives and similar institutions.

This reduction aligns closely with regulatory policy directions. In 2025, financial regulatory meetings and public statements repeatedly emphasized "deepening the reduction in quantity and improvement in quality of small and medium financial institutions," calling for the clearance of high-risk, low-efficiency entities to enhance the overall quality of local small and medium financial institutions.

Policy measures have further advanced. The 2026 Government Work Report, addressing the active and prudent resolution of financial risks, specified the need to bolster resources and methods for handling risks in local small and medium financial institutions. It advocates adhering to market-oriented and rule-of-law principles to orderly advance the disposal of high-risk institutions.

During the Two Sessions, the reform and risk mitigation of small and medium financial institutions, along with rural finance, were hot topics among delegates and committee members. National Committee member Lin Gang, former Party Secretary and Chairman of Sichuan Bank, noted in a media interview that financial institutions that are too fragmented and small have weak risk resistance. Balancing quantity and quality is beneficial for future financial development. In recent years, differentiated development in local finance has yielded results, with business models showing clear diversification.

Regarding the future of rural finance, National People's Congress delegate Yang Weikun, President of Hebei Finance University and Vice Chairperson of the Hebei Provincial Committee of the Chinese Peasants' and Workers' Democratic Party, emphasized the need to improve a multi-tiered, differentiated, and collaborative rural financial system.

It is anticipated that rural finance will exhibit new characteristics in the new era of agricultural and rural development. Yang Weikun believes that cultivating versatile talent is crucial. During the "15th Five-Year Plan" period, agricultural development will focus more on intelligence and integration, posing new demands for rural financial professionals. Rural financial institutions should strengthen the training of composite professionals who understand both finance and agriculture, as well as technology.