Chinese Banks Defer 1.3 Trillion Yuan in Repayments for Small Business Loans Following COVID-19 Outbreak
The Chinese banking sector has provided mass deferrals on repayments for loans made to Chinese small businesses that have been hard hit by the COVID-19 pandemic.
On 1 March China Banking and Insurance Regulatory Commission (CBIRC) and the Chinese central bank led the launch of policies for the provisional deferral of principal and interest repayments on loans made to micro, small and medium-sized enterprises (MSME’s).
According to a recent report from the Chinese central bank’s official news outlet, the policy has thus far led to deferrals for 1.3 trillion yuan (approx. USD$182.37 billion) in loan repayments owed by small businesses in China.
During the period from 25 January to 15 May 2020 Chinese banks provided deferrals on 1.28 trillion yuan in principal repayments for MSME loans, involving a total of 750,000 borrowers.
Chinese banks also provided deferrals on interest repayments worth 55.99 billion yuan during the same period, involving 579,000 borrowers.
On 1 June PBOC announced that it would purchase up to 40% of the financial inclusion micro-and-small enterprise loans made by regional legal person banks during the period from 1 March to 31 December 2020, estimated to be worth 400 billion yuan.