Zhang Zhiqin, a farmer in Northwest China's Gansu province, will spend more time this year taking care of his family fortune: three cows and five lambs, which he bought with the help of local banks.

For many years, the people of Chisha village in Dingxi, Gansu, have made a living through farming, but steep mountainous terrain, frequent droughts and a hostile natural environment mean profit margins have always been slim.

Zhang dreamed of raising livestock, but lacked the money to buy any cows or sheep. "My neighbors were also poor. I didn't know who I could borrow the money from," he said.

In 2006, China started a loan program for poverty-hit villages to fund the development of new businesses. Every village was given between 100,000 ($14,500) and 150,000 yuan, and farmers could borrow up to 10,000 yuan each.

However, due to quota limitations and short lending periods, the program was ultimately unable to meet the demands of many.

In 2015, the city of Dingxi upgraded the loan program and raised lending quotas, allowing villagers to borrow 50,000 yuan from banks after saving 10,000 yuan as a credit guarantee.

"We also prolonged the repayment period to meet the long-term financing needs of farmers," said Xu Binke, deputy head of Tongwei county in Dingxi.

Zhang was one of the beneficiaries of the updated program last year. He borrowed 50,000 yuan to buy his cows and lambs, as well as agricultural production tools to expand the area he has under cultivation. "I will sell six or seven grown sheep and one cow some months from now. The income will be much higher than from selling crops," he said.

More than 1,800 villages in Dingxi have established special associations to help villagers obtain loans. Each receives 300,000 to 500,000 yuan.

By last year, about 530 million yuan had been lent to 867 such associations, benefiting 12,000 farmers.

The project has also allocated a sum of money to buy critical illness insurance for poor villagers to help cover their medical costs. As of last month, 166,000 people had been included in the insurance program.

"We are no longer worried about medical costs and can pay more attention to our farm work," Zhang said.