Hi from economics point of view, why did this happen?

rural credit cooperatives extended consumption loans to indigent households. Nonperforming loans increased in the 1990s after fifinancial controls were instituted. In 1994, 31.4 percent of the loan assets of the rural credit cooperatives were nonperforming, and in 1996 nonper- forming loans increased to 38 percent, according to Dai Xianglong (1997), the Governor of the People's Bank of China. The shareholder equity of the rural credit cooperatives was reported to be 63.2 billion yuan in 1995, 54.8 billion yuan in 1996, 31 billion yuan in 1997, 15.1 billion yuan in 1998, and -8.5 billion yuan in 1999 (China Finance Association 1997, p. 452; 2000). Within a single decade of policy reversals, an institution that had played an important role in China's economic takeoff became technically insolvent.