The inland Chinese province of Anhui has announced the start of a trial scheme for the provision of emergency loans to local small and medium-sized enterprises (SME’s) still reeling from the economic impacts of the COVID-19 pandemic.
The “SME Emergency Loan Trial” (小企业应急贷款试点) will focus on cash-strapped SME’s in sectors heavily affected by the COVID-19 pandemic as well as recent flooding in China, including the manufacturing, foreign trade and tourism sectors.
SME’s that have found it difficult to obtain bank loans due to lack of collateral assets will also be targeted.
Financial institutions participating in the first round of the trial will include the Export-Import Bank of China, as well as all of China’s big six state-owned banks.
Qualifying medium-sized enterprises will be able to access an emergency loan quota of up to 50 million yuan under the scheme, while for small enterprises the quota is 10 million yuan.
The annualised interest rate for such loans will be no higher than the average rate for financial inclusion SME loans in the first half of 2020. Banks will also be encouraged to make use of the loan prime rate (LPR) in the pricing of funds.