CBIRC Calls for Increase in Lending to Micro-Enterprises, Reduction in Collateral Dependence

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China’s banking regulator has issued another call for lenders to step up support for micro and small enterprises (MSE) that have traditionally struggled to obtain financing.

On 25 June the China Banking and Insurance Regulatory Commission (CBIRC) convened a meeting on financial services for the micro and small-enterprise sector in the Zhejiang province city of Taizhou, with the themes of “firmly remembering the original missions of preserving risk and servicing the real economy.”

According to CBIRC the MSE sector plays a key role in stabilising growth, making structural adjustments, stabilising employment and improving living standards, and is a key embodiment of the ability of the banking sector and regulatory agencies to service the fundamental interests of the real economy and the masses.

The meeting called for banking-sector financial institutions to “strengthen services capability, raise risk management levels, reduce excessive dependence upon collateral, and gradually increase the share of credit loans, in order to ‘lend when loans can be made.'”

Regulators will “further strengthen regulatory guidance for MSE finance…and highlight differentiated regulatory guidance for MSE financing with regard to loan risk capital weightings and financial asset risk categorisation systems.”

CBIRC called for banking sector financial institutions to “firmly establish the mentality that MSE finance is the future, and truly make the development of MSE finance an effective path to optimisation of their own business structures and achieving business model transitions and upgrades.”

The CBIRC meeting also called for the active establishment of credit information sharing platforms and comprehensive financial services platforms.

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