Since 1998, TPAF has provided small loans on a repeat basis to over 2,200 rural Tibetan families in target villages of townships in Lhoka and Nakchu Prefectures, and more recently in Namling County of Shigatse Prefecture. The success of this activity in promoting cottage enterprises and raising poor household incomes has helped to popularize the rural lending in Tibet.

The Agricultural Bank of China (ABC) is now actively engaged in making highly subsidized credit available to rural agricultural and animal husbandry communities. This has been well received. However, its lending in rural areas has often been for consumption rather than investment purposes, and has to date not reached the poorest households located in the more remote, hard to access areas. This situation is changing with ABC lending in support of the important TAR program to construct new and improved housing to all rural families.

TPAF provides a distinctive approach to household lending tailored to local Tibetan community conditions and requirements. In Lhoka Prefecture and Namling County villages, household loans are provided to women on behalf of their families. The women are organized into small five-member peer support groups. Each of five women in the group is responsible for managing the credit provided and for successfully paying back all loan principle and interest. When the group as a whole pays back their loans, each woman will then qualify for a second, generally larger loan. In Nakchu Prefecture villages, loans are made to groups of families, as individual nomad families have not been generally prepared to take on personal debt.  In both cases, senior township government officials and village muncheba women leaders have been trained to help supervise the lending and repayment of small loans.   

TPAF loans in agricultural areas have been used by borrowers to establish such income generating activities as village retail stores, furniture making, grain milling, carpet and clothing making, small tractors for village transport and marketing, and tea houses. In nomad livestock areas, loans have been used more for the purchase of additional livestock, tractors for marketing of livestock and livestock products, tea houses and village stores. Payback has been 97-98 percent since the commencement of the lending in 1998.

In 2008, TPAF will be helping the TAR Poverty Alleviation Office to introduce similar approaches to household lending which it believes can help it to target its substantial poverty alleviation funds more precisely on the needs of poorest households.