Data from the China Banking and Insurance Regulatory Commission (CBIRC) indicates that the bank loan balance to small and micro-enterprises across China hit 31.76 trillion yuan (approx. USD$5.03 trillion) by the end of the first quarter of 2018.
The figure marks an increase of 1.02 trillion yuan compared to the end of 2017, with the number of small and micro-enterprise borrowers reaching 15.45 million in total.
The rural lending balance had also reached 31.55 trillion yuan as of the end of Q1 2018, for a YoY rise of 7.9%, while as of the end of 2017 the number of rural households who enjoyed agricultural insurance had reached 210 million.
The Chinese central government is pushing for greater financial inclusion, with policies such as targeted required reserve ratio cuts incentivising commercial banks to lend more to small and micro-enterprises.
China’s 2018 Government Work Report calls for reform and improvement to the financial service system, support for financial institutions in the expansion of financial inclusion business, the standardised development of local small and medium-sized financial institutions, and efforts to resolve the difficulty that small and micro-enterprises experience when seeking finance.
Wang Zhaoxing (王兆星), vice-head of CBIRC, said that the main commercial banks had all established financial inclusion departments, while more than 1600 rural county banks and 17 private banks had obtained approval for establishment, giving greater impetus to the extension of credit to small-scaleborrowers.
Wang further points out that the banking sector has cut fees by over 44 billion yuan in 2017, and said that loan rates and “overall controlled within a rational range, and declining amidst stability.”
“We require that commercial banks drive more of their loan funds to small and micro-entrprises,” said Wang.
According to Wang regulators are also encouraging qualified banking-sector financial institutions to issue special bonds to expand funding sources for services for small and micro-enteprrises, as well as encouraging large-scale commercial banks and policy banks to provide long-term, stable, low-cost funds to small and medium-sized financial institutions, in order to drive a reduction in funding costs for micro-enterprises.
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