App | 中文 |

HOME >> PREMIER >> NEWS

China to further help lower financing costs for micro, small businesses

Zhang Yue
Updated: Dec 13,2019 11:29 PM    english.www.gov.cn

China will smooth the transmission mechanism of monetary policies and further bring down overall financing costs for micro and small businesses as part of efforts to address their financing difficulties.

The arrangements were made on Dec 12 at the State Council's executive meeting chaired by Premier Li Keqiang.

The Chinese government puts great emphasis on cutting real interest rates for micro and small businesses. General Secretary Xi Jinping has stressed on multiple occasions the need to deepen supply-side structural reform in the financial sector, improve financial services to micro and small businesses, and make financing more accessible and affordable for private, micro and small firms. Premier Li Keqiang has called for redoubled efforts to ease financing difficulties, including raising lending to micro and small firms at lower costs. He issued clear requirements on reducing financing costs.

Thanks to multi-pronged efforts, by the end of October, the balance of inclusive loans to micro and small businesses increased by 23.3 percent, nearly 11 percentage points higher than the overall loan growth rate. Interest rates for these firms came down by 0.64 percentage points.

"We met to discuss how to ease financing difficulties facing micro and small businesses right after the Central Economic Work Conference, a topic that received much attention at the conference," Premier Li said. "Keeping employment stable will be our top priority next year. As stable employment largely hinges on micro and small businesses, we must give them more support."

Guided by the decisions laid down at the Central Economic Work Conference, the meeting decided to bring down overall financing costs of inclusive loans for micro and small businesses by another 0.5 percentage points next year, and make sure that inclusive loans continue to grow faster than overall loans, and that such loans issued by the five major State-owned commercial banks increase by no less than 20 percent.

"While there is fairly sufficient 'water' in the 'pond', private companies, especially micro and small ones, still find it difficult to access affordable financing. It is imperative to take decisive measures to improve the monetary transmission mechanism and bring down real interest rates," Premier Li said.

The meeting urged efforts to smooth the transmission mechanism and overhaul fees in the financing process. Banks will be supported in increasing medium and long-term loans to the manufacturing industry, and developing credit loans and services that facilitate the roll-over of outstanding loans.

The credit quota for micro and small businesses with loans that are eligible for preferred risk weight formula will be raised from 5 million to 10 million yuan.

The average rate of government financing guarantee and re-guarantee institutions will be brought down to less than one percent.

"More research is needed to make breakthroughs," Premier Li said. "When addressing financial risks of small and medium-sized banks, local governments must step up their primary responsibilities. At the same time, such efforts must not block the lending channels for micro and small businesses."

VIDEOS

VIDEOS

SERVICES

CONTACT THE PREMIER

Mobile