Can land reserve institutions provide loans

How are land reserves funded?

Before 2016, the funding for land reserves was primarily derived from fiscal appropriations, land reserve loans, and other sources such as land transfer fees. Among these, land reserve loans can be referred to as the funds sought by land reserve institutions from banks for land acquisition and early-stage development purposes.

How did Land Reserve loans affect local governments?

This transition rendered land reserve institutions a form of local government financing entity, and land reserve loans became a means of government financing, thereby giving rise to local governments’ implicit debt.

Can land reserve financing policy reforms standardize local government borrowing?

The existing literature on land reserve financing policy reforms predominantly focus on policy background, impact, and countermeasures. For example, scholars have indicated that the policy to halt land reserve loans can standardize local government borrowing [ 19 ].

How do land reserve institutions work?

Land reserve institutions are established under the approval of local governments and operated under the jurisdiction of land resource management departments, facilitating unified land reserve operations. Aside from a small initial capital injection, local government fiscal investment in land reserve institutions remained minimal.

How did local government invest in land reserve institutions?

Aside from a small initial capital injection, local government fiscal investment in land reserve institutions remained minimal. To meet the funding requirements for land acquisition and reserves, policies permitted land reserve institutions to secure loans by pledging reserved land to banks.

Why are Land Reserve loans important?

Due to the limited availability of fiscal appropriations and the instability of other revenue sources, land reserve loans became not only the main source of funding for land reserves but also the traditional financing method.