The Chinese government has further extended deferrals on repayments for loans made to micro and small-enterprises (MSE’s) that were originally launched in response to the impacts of the COVID-19 pandemic.
On 21 December Premier Li Keqiang convened a meeting of the State Council which approved “appropriate extensions” of the deferral of principal and interest payments for financial inclusion MSE loans that were originally scheduled to run until the end of the first quarter.
Such extensions will be made on the basis of “market principles,” and independently negotiated by banks and enterprises.
The State Council will also “continue to provide preferential fund support on the basis of 40% of loan principal to the provision of financial inclusion MSE loans by qualified regional legal person banks.”
On 1 June a slew of China’s top financial regulators issued the “Notice Concerning Further Implementing Stage-based Deferrals of Principal and Interest Payments for Micro, Small and Medium Enterprise Loans” (关于进一步对中小微企业贷款实施阶段性延期还本付息的通知).
The Notice stipulated that Chinese companies could apply with banks to defer their payments on financial inclusion MSE loans scheduled to mature before the end of 2020 until as late as 31 March 2021.