Chen Zhiwu Says Fintech’s Impact on Financial Inclusion Limited, Artificial Interference to be Avoided


One of China’s leading economists says that it will still be difficult for small and micro-enterprises in the country to obtain financing despite the improvements brought by fintech, while also warning against artificial interference in the lending market.

Chen Zhiwu, professor of finance at the University of Hong Kong, said that fintech will improve the ability of small and micro-enterprises to obtain financing by helping them in areas such as credit checks.

Chen, one of China’s leading public intellectuals and most renowned economists, made the remarks at a speaking event jointly held by Sina and the International Financial Museum (国际金融博物馆) on 14 October.

According to Chen the internet has changed the finance sector by reducing financial transaction costs and greatly expanding the geographic scope of transactions as well as client volumes.

Big data is play ing a key role in facilitating credit assessments, which is of especially benefit for small and micro-enterprises in China seeking funds.

Chen stressed, however, that small and micro-enterprises will continue to find it both difficult and expensive to obtain financing because they are inherently risky and their future prospects are uncertain, and cautioned against artificial interference to reduce interest rates on their behalf.

“At present, on the one hand we must use internet technology to the greatest extent possible to reduce the financing costs of small and micro-enterprises and resolve their financing difficulties,” said Chen.

“On the other hand we must also accept the fact that compared to large enterprises, financing will definitely be more difficult and expensive for small and micro-enterprises – this is the result of standard economic laws.”