More than 100 banks in China have signed up for a new fintech-driven plan to provide greater lending assistance to micro-enterprises around the country weathering the economic impacts of the novel coronavirus.
Ant Financial-backed MYbank and the All-China Federation of Industry and Commerce launched the “Non-contact Loan Micro-assistance Plan” (无接触贷款助微计划) on 5 March.
The Plan hopes to provide financial support to around 10 million micro-and-small enterprises (MSE’s) around China in the resumption of work and production in the wake of the coronavirus, as well as efforts to expand production.
The “non-contact loans” in the title of the Plan refer to digitised loans which involve online application and do not entail any direct human contact.
The Plan will focus in particular on ten key measures including:
- The provision of loans to MSE’s to pay off their loans in advance,
- The provision of specialist funds for businesses in the catering sector,
- The provision of interest-free loans to small and medium-sized operators in the fast-moving consumer goods sector,
- The provision of specialist loans to the logistics sector,
- The provision of discounted working capital to truck drivers,
- The provision of specialist loans to farmers,
- The provision of funding support to enterprises experiencing sales difficulties,
- Expanding the scope for the provision of preferential bills discounts,
- Helping MSE’s that enjoy a strong market reputation to resume work rapidly.
- Helping offline businesses to expand their online operations channels.
105 Chinese banks have signed up for the plan, which also enjoys the participation of China’s county-level authorities.
China’s big six state-owned lenders are amongst the participating banks, including ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and the Postal Savings Bank of China.
23 Chinese Banks Reduce Interest Rates for Business Loans During Coronavirus Outbreak
Think Tank Frets over Impact of Coronavirus on China’s Small Businesses and Regional Banks
Coronavirus Could Be Worse for Chinese Banks than SARS: S&P