CBIRC Hopes to Drive Lending to China’s Small Businesses with New Assessment Measures for Banks

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China’s banking regulator hopes to increase lending to small businesses via the launch of a new set of assessment measures for commercial lenders.

On 10 April the China Banking and Insurance Regulatory Commission (CBIRC) issued the draft version of the “Commercial Bank Micro and Small Enterprise Financial Services Regulatory Assessment Measures (Trial)” (商业银行小微企业金融服务监管评价办法(试行)) for the solicitation of opinions from the public.

According to CBIRC the goal of the Measures is to “better employ the guidance role of regulation with regard to comprehensive, scientific assessment of the financial services work of commercial banks for micro and small enterprises.”

The Measures stipulate that “commercial banks should make the results of assessment a key parameter for examination of micro and small enterprise financial services performance, and each year openly disclose MSE financial services information to the public via social responsibility reports and annual reports.”

The assessment system is divided into four tiers, with indices covering the lending conditions, systems and mechanisms development, implementation of key regulatory policies, products and services innovation and supervisory inspections.

CBIRC said that the results of assessments will be used as a key basis for policy trials and incentive mechanisms in relation to financial inclusion.

“Formulation of the measures is a key measure for CBIRC in driving banks to ease the problems of difficult and expensive financing for MSE’s,” said the regulator.

“The integration of MSE financial service regulatory policy demands and the formation of a multi-valency integrated assessment index system comprised of ‘one list, differentiated weightings’ will guide and spur commercial banks to continue to raise the quality and effectiveness of their services for MSE’s.”

China has been pushing hard for banks to increase financial inclusion and expand lending to smaller businesses – efforts which have stepped up in the wake of the COVID-19 outbreak.

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