銆€銆€Rural villagers living in Yuyao, Zhejiang Province, no longer need to worry about red tape often associated with receiving bank loans. A new program allows aspiring entrepreneurs to borrow money from local banks after passing a "morality credit check."

銆€銆€A man shows his morality credit check.

銆€銆€With a ceiling amount near 200,000 yuan (US$32,000), the Yuyao Rural Cooperative Bank initiated the moral banking system in the middle of 2012 in order to streamline the loan approval process to help low-income farmers who are unable to qualify for mortgages.

銆€銆€Local bank officials posted the new loan approval process online, according to a recent report by China News Agency and CCTV.

銆€銆€According to Li Jun, the deputy director at the Ethic Publicity Office in Yuyao, the standards for applicants' moral credit histories include compliance with laws and social ethic responsibilities, including individuals' integrity, diligence, family background and community involvement. Negative factors that count against an applicant include past criminal behavior, drug abuse and a history of family abuse.

銆€銆€Applicants who score 80 on a 110-point-scale qualify for a moral bank loan, and the interest rate for these loans average 2,000 yuan less compared to standard bank loans.

銆€銆€According to a report by China News Agency, seven villagers from Shaojiaqiu Village received a total of one million yuan in loans from the Yuyao Rural Cooperative Bank as of June 2012.

銆€銆€Despite popular support from the local community, the moral banking system has been received with suspicion in certain online communities, China News Agency reported. Skeptics accuse the bank of charging too-high interest rates.

銆€銆€Yang Jianhua, the director of the Investigative Center at the Zhejiang Academy of Social Sciences, refuted these accusations by saying the moral banking system provides rural villagers with easier access to credit. But Yang also cautioned against expanding the system too quickly, as the approval process needs to be further improved so that more farmers can take advantage of the system.

銆€銆€China has a long-held tradition of combining law with moral virtues, and believes both characteristics are important in managing a country.