The party secretary of the Chinese central bank and head of the China Banking and Insurance Regulatory Commission (CBIRC) has robust targets to drive financing of private enterprise by banking sector financial institutions.
Speaking to China Securities Journal at a recent meeting on private enterprise in Beijing, Guo Shuqing (郭树清) highlighted the continued reluctance of Chinese lenders to provide financing to the private sector despite its increasing share of economic activity.
“According to incomplete statistics loans to private enterprise account for just 25% of the current banking sector lending balance, yet the private sector accounts for a more than 60% share of the national economy,” said Guo Shuqing.
“Loans obtained by private enterprise from banks do not match or correspond to their share of the economy.”
Guo outlined a raft of targets to boost credit support for private enterprise from Chinese banks.
“Initial consideration is being given to ‘1-2-5’ targets for loans to private enterprise,” said Guo.
“This means that out of new loans to companies, large-scale banks shall make at least 1/3 of such loans to private enterprise, small and medium banks must make 2/3 of such loans to private enterprise, so that in three years time lending to private enterprise accounts for no less than 50% of all new loans to companies.”
PBOC Fires “Three Arrows” to Drive Funds Towards Private Enterprise