Image credit: Caixin Global
BEIJING: China will continuously improve financial service supplies for micro and small businesses this year, steadily increase bank credit, optimise credit structure and promote a reduction of comprehensive financing costs, said the China Banking and Insurance Regulatory Commission (CBIRC).
The regulator has recently issued a notice, saying that the banking sector should continue to achieve increases in the growth rate of inclusive loans to micro and small businesses and increases in the number of such businesses that obtained inclusive loans.
Banks should strive to continuously increase the proportion of unsecured loans to total inclusive loans this year.
In addition, for a large state-owned commercial lender or a national joint-stock commercial lender, the number of its new micro and small business clients that have obtained loans from the bank for the first time are projected to be greater than that of the previous year.
The CBIRC also urged the banking sector to work hard so that the overall interest rate of new inclusive loans to micro and small businesses for the full year will see a slight decline, compared with the rate in 2021.
Banks are expected to ramp up medium and long-term credit issuance to micro and small businesses in the advanced manufacturing sector and strategic emerging industries, apart from supporting the medium and long-term demand for funds in the areas of equipment upgrade, technological innovation and green transitions.
The regulator also encouraged banks to partner with external institutional investors in exploration of a new model to serve small tech startups by combining loans with direct investments.
For those micro and small businesses that face temporary difficulties but still have the intention to repay loans and the ability to create jobs, banks should negotiate with them and decide how they will make loan principal and interest payments according to the principle of market orientation.
In addition, the CBIRC said all levels of regulators and banking and insurance institutions should push for the construction of credit information-sharing mechanisms and financing service platforms as well as promote the expansion of the scope of information sharing in an orderly manner.
Meanwhile, Premier Li Keqiang has called for heightened steps to stabilise economic growth as he highlighted mounting uncertainties and challenges facing the economy as the nation grapples with its biggest Covid-19 challenge since the early days of the pandemic.
While presiding over a symposium on the performance of the economy with experts and business leaders on Thursday, Li stressed the need for more proactive measures to stabilise growth, especially regarding the job market and commodity prices.
Policy measures must be front-loaded and scaled up when appropriate, while policies already rolled out must be put in place as soon as possible, he said.
Policies that are in the pipeline should be introduced at an earlier date, and new plans should be considered, the premier added.
Li underlined the complex and evolving international landscape and the frequent recent Covid-19 outbreaks as headwinds facing the economy, saying that some issues of concern have “exceeded expectations”.
The purchasing managers’ index (PMI) for China’s manufacturing sector stood at 49.5 in March, compared with 50.2 in February, data from the National Bureau of Statistics showed, slipping into contraction after staying in expansionary territory for four consecutive months.
The non-manufacturing PMI, which covers services and construction, came in at 48.4 versus 51.6 in February, slipping into contraction mode for the first time in seven months.
Li reiterated the role of market players as key pillars to stabilise economic fundamentals, saying that the government must help smaller firms and self-employed individuals who are now faced with operational difficulties.
He pointed to grain production, the supply of energy and unimpeded logistics as key factors underpinning the stability of commodity prices.
It is important to ensure supplies and stable prices of key products used in agricultural production and guarantee a bumper grain harvest this year, he said.
The potential for up-to-date production capacity of coal must be further unleashed, and policies to support coal-fired power plants must be put in place to ensure the stability of energy supplies, the premier said.
He called for more coordinated measures to ensure the orderly operation of key transport corridors and ports, saying that more targeted measures must be considered to help truck drivers and logistics operators reduce costs.
Li pledged to continue offering a level playing field for businesses of various types and promote the healthy growth of the platform economy to create more jobs.
Source: https://www.thestar.com.my/business/business-news/2022/04/11/improving-inclusive-------loans-to-small-firms