Private online lender XWBank is working with China’s big three policy banks to provide interest free loans to businesses in 81 cities as part of efforts to help the Chinese economy recover from the impacts of the COVID-19 outbreak.
Starting from 21 May China’s three policy banks will work with XWBank to provide in “interest free vouchers” (免息券) for up to 10 billion yuan in loans to micro and small businesses.
The first batch of loans will be available in 81 cities through China, and will be accessible to licensed small-scale vendors via Alipay.
Individual borrowers will each have access to two interest free loan vouchers, each representing 10,000 yuan in loan funds which will be free of interest for a period of one month.
The China Banking and Insurance Regulatory Commission (CBIRC) will be responsible for guiding the involvement of the policy banks in the process, who will provide low-cost funds to XWBank for subsequent channelling to small and micro-enterprises via fintech channels.
China’s three policy banks are comprised of the Agricultural Development Bank of China (ABDC), the China Development Bank (CDB) and the Export-Import Bank of China (EXIM).
Alipay said that the initiative marks the first time that interest-free voucher have been distributed to micro and small-enterprises on a nationwide scale.
XWBank president Jin Xiaolong (金晓龙) said that he hoped that “consumer vouchers and interest free vouchers [will] jointly drive further re-warming of small businesses.”