Banking Regulator Wants to Cut Financing Costs for Micro-Enterprises and Private Business


The China Banking and Insurance Regulatory Commission (CBIRC) has stressed the need for further reductions in the financing costs of the country’s small and micro-enterprises.

A meeting held by CBIRC head Guo Shuqing (郭树清) during an inspection of the Bank of China headquarters concluded that the problems of financing being both difficult and expensive remain “quite pronounced” in China, according to a report from state-owned media.

The meeting called for banking sector financial institutions to “better service private enterprises and small and micro-enterprises,” and emphasised a focus on seven key areas in future:

i) Deep understanding of the significance of properly perform financing services for private enterprise and small and micro-enterprise.

“[Banks] must accelerate an upgrade in the ability to provide financial services to private enterprise and small and micro-enterprises.”

ii) Accelerate the establishment of incentive mechanisms that can effectively stimulate the initiative of the grass-roots level.

iii) Actively push for reductions in the financing costs of small and micro-enterprises.

“Large and medium-sized banks must expand the vigour of credit provision, rationally set financial inclusion small and micro-loan prices, and push for banking sector financial institutions to markedly reduce the real lending rates for small and micro-enterprises.

“Gradually reduce reliance upon collateral guarantees and external assessments, and reduce the financing cost burden for small and micro-enterprises from the source.”

iv) Connect information channels.

“Actively connect with the data of the relevant government departments, and make comprehensive usage of internal and external data…use the internet, big data, artificial intelligence, cloud computing and other new technologies to accelerate the establishment of integrated online and offline service channels.”

v) Actively assist troubled enterprises that have development potential.

vi) Correctly understand and appropriately grasp regulatory and policy intentions, and promptly report to regulatory departments on any difficulties or problems encountered during the process of execution.

vii) Actively match the financial inclusion service optimisation policies unveiled by relevant departments and local governments.