A set of intensive financial measures will be implemented to support micro, small and medium-sized, and private enterprises, Premier Li Keqiang said at the State Council executive meeting on March 31,

It was the eighth State Council executive meeting over two months urging supportive measures for smaller and private enterprises.

Fiscal and monetary policies should be further leveraged to help all types of businesses, especially micro, small, medium-sized, privately owned enterprises, and those in foreign trade, to weather this difficult time, the Premier said.

At the State Council executive meeting on Feb 5, Premier Li called on banks to provide low-interest loans to enterprises producing, transporting and selling key medical supplies and life essentials.

On Feb 11, the executive meeting required local authorities to establish support mechanisms to assist smaller and private enterprises to go through the epidemic.

The meeting on Feb 18 decided to provisionally reduce or exempt insurance fees that enterprises pay for their employees concerning pension, unemployment and work injuries to minimize the impact of novel coronavirus on smaller enterprises.

Financial institutions were encouraged to extend loan repayment terms for smaller enterprises and increase new preferential loans, according to the meeting on Feb 25.

The meeting on March 10 decided to implement targeted cuts to required reserve ratios, increase extra cuts for joint-stock banks, and to promote commercial banks to increase loans to smaller and private enterprises.

And Premier Li urged solving difficulties for smaller and private enterprises, and allowing them to take advantage of policy benefits, at the meeting on March 17.

He again required efforts to carry out policies as soon as possible to help and support smaller and private enterprises, at the meeting on March 24.

Considering the unexpected changes in the epidemic at home and abroad, and global economy and trade, the Party Central Committee and State Council released a slew of policies to ensure supplies and help enterprises resume production, the Premier said at the meeting on March 31.

Compared to the usual policies after the Spring Festival, which are aimed at ensuring supplies and assisting enterprises, policies issued this year will give priority to expand domestic demand, help production resumption and ensure employment, he said.

However, increasing financial and monetary support to smaller and private enterprises should remain constant throughout all policies, he added.

It was decided at the meeting that for small and medium-sized banks, re-lending and re-discount quota will be increased by one trillion yuan. Targeted cuts in the required reserve ratio will be further implemented to encourage banks to funnel all the newly obtained funding in the form of loans at concessional rates to micro, small and medium-sized enterprises, which are great in number and cover many sectors. The agricultural and foreign trade sectors and sectors heavily affected by the outbreak will get greater loan support.

Financial institutions will be supported in issuing 300 billion yuan in financial bonds to be used as loans exclusively targeting small firms.

Accelerated efforts should be made to implement related preferential policies to guide small and middle-sized banks to provide loans to more micro, small and medium enterprises, the Premier said, adding that without these enterprises, small and medium banks could not survive.

The meeting called for an increase of one trillion yuan over the previous year in net financing from corporate credit-backed bonds to expand low-cost financing channels for private and smaller businesses.

It also encouraged developing supply-chain financial products such as raising funds pledged against orders, warehouse receipts and accounts receivable. Smaller firms may thus gain access to another 800 billion yuan in annual financing backed by accounts receivable.

And the meeting urged strengthening the loan risk sharing mechanism. It encouraged developing commercial insurance products to enhance credit for micro, small and medium-sized businesses, and lowering government-backed financing guarantee fees to ease the overall financing burden on smaller firms.

“Smaller businesses have been hit the hardest by the outbreak. Their restart of operations affects the entire industrial chain and is vitally important for keeping employment stable,” Premier Li said, adding that if smaller enterprises cannot run well, society will not remain stable.