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Govt to extend exclusive, preferential financial policies for small businesses

Updated: Mar 25,2021 09:50

China will extend the preferential policies of loan repayment deferral and credit loan support for small and micro-sized enterprises to the end of the year, according to the State Council executive meeting presided over by Premier Li Keqiang on March 24.

This year, the government should continue to support small and micro-sized enterprises, allowing them to play a better role in stabilizing employment, Premier Li said.

He said the two direct monetary policies for small and micro-sized enterprises last year helped them through difficulties, and played an important role in ensuring employment and livelihood, and stabilizing fundamentals of the economy.

The economy is recovering and growing, while its basis is not solid enough, Premier Li said, adding that it is necessary to maintain the continuity and sustainability of macro-economic policies.

The overall picture of the macro economy should be combined with activities in the micro economy, he stressed.

Small and micro-sized businesses support the fundamentals of employment, and they are the lifeblood of employment and the economy, said the Premier.

According to the Premier, this year, financial support to small and micro businesses will not decrease, and they will have more conveniences in financing with lower costs.

It was decided at the meeting that the two monetary policy tools will be continued until the end of this year, a further extension from the end of the first quarter.

For inclusive loans to small and micro-sized businesses due before the end of this year, borrowers and banks may negotiate on their own over postponing principal and interest repayments. And local incorporated banks doing so will still be incentivized at one percent of the loan principal.

Eligible banks that issue credit loans to small and micro-sized businesses will continue to get concessional financial support amounting to 40 percent of the loan principal.

The Premier urged related departments to enhance policy support to China’s registered self-employed businesses, which total more than 90 million and create jobs for over 200 million people.