China’s financial inclusion drive has resulted in a surge in lending to micro and small-enterprises in the first half of 2020.
MSE financial inclusion loans made by banking sector financial institutions saw a YoY rise of 28.4% in the first half to reach 13.7 trillion yuan in total, according to the latest data from the China Banking and Insurance Regulatory Commission (CBIRC).
The big five state-owned banks saw an increase in MSE loans of 34.6% compared to the start of the year.
New financial inclusion MSE loans had an average interest rate of 5.94%, for a decline of 0.76 percentage points compared to the full year average for 2019.
As of 30 June the non-performing financial inclusion MSE loan balance was 400 billion yuan, for an increase of 9.25% compared to the start of the year.
The NPL ratio was 2.99%, 0.88 percentage points ahead of the NPL ratio for all forms of lending.
A CBIRC spokesperson said that reform and opening, the use of tech and improved regulation had achieved a gradual increase in “targeted irrigation,” while overall credit risk in China is “completely under control.”