China announced a new plan to promote the sharing and application of credit information in a bid to boost financing of the vast group of micro, small and medium-sized enterprises.

The new plan, released on Dec 29 by the General Office of the State Council, will give full play to credit information's role in increasing financing of MSMEs, which will help promote the establishment of a long-term mechanism to make financing for MSMEs easier and affordable, officials said.

Zhao Chenxin, secretary-general of the National Development and Reform Commission, said the plan is part of the government's efforts to support market entities and deal with downward pressure on the economy.

"Guided by the objective of supporting banks and other financial institutions to better serve the MSMEs, the plan will help collect various types of corporate credit information … make financing for MSMEs easier and affordable, relieve their burdens and boost their development," Zhao said during the release on Dec 29 in Beijing.

The new plan requires strengthening the sharing and integration of credit information related to taxes, social insurance premiums and real estate, deepening development and utilization of credit information and protecting the legitimate rights and interests of information providers.

More efforts will also be made to improve the credit evaluation index system for MSMEs and establish an information security management system.

Chen Hongwan, director of the Department of Fiscal and Financial Affairs of the NDRC, highlighted the need to improve sharing and application of credit information to help market entities in financing, with a focus on key fields such as production and corporate operations.

"Targeting woes affecting MSMEs' financing, the new plan will help solve problems such as lack of effective mortgages and the information asymmetry between banks and enterprises," Chen said. "It will help alleviate difficulties for MSMEs, ensure them better access to loans and mitigate the risks of nonperforming loans for financial institutions."

The NDRC data showed China has launched a national credit service platform to facilitate SME financing, covering more than 2,000 financial institutions and over 13.8 million enterprises in 103 places.

Zhao from the NDRC called for more efforts from local governments to support the development of MSMEs, saying local governments will play a key role in boosting lending to them.

Local governments should make a big push to build a local financing and credit service platform, strengthen the collection and sharing of credit information and increase policy support for financing of MSMEs, the plan said.

Looking ahead, the country will make more efforts to maintain the growth of loans for micro and small business, said Mao Hongjun, an official from the Department of Financial Inclusion of the China Banking and Insurance Regulatory Commission.

More efforts will also be made to encourage banks to step up lending to micro and small businesses in key fields including independent and controllable industrial and supply chains, technological innovation, green development and foreign trade, and provide targeted financial services for MSMEs that specialize in niche sectors.

Yang Haiping, a researcher at the securities and futures research institute of Central University of Finance and Economics, spoke highly of recent government measures to support MSME development, saying the government should also focus on creating a better business environment, increasing policy support and boosting innovation-driven development.

When it comes to offering MSMEs financial services, the key focus will be boosting technology-driven innovation in financial services and building an incubation and support mechanism for MSMEs, said Yang, who is also general manager of the strategic research department of the Bank of Inner Mongolia.