The latest data from the Chinese central bank points to a surge in lending to micro-loans following a push for greater finance inclusion from Beijing in the wake of the COVID-19 pandemic.
As of the end of July 2021 China’s financial inclusion micro-and-small loan balance stood at 17.8 trillion yuan, for a YoY increase of 29.3%, according to data unveiled by the People’s Bank of China (PBOC) at a press conference held on 7 September.
Pan Gongsheng, (潘功胜) PBOC deputy-governor and head of the State Administration of Foreign Exchange (SAFE), said that these loans had provided support to 38.93 million micro-and-small enterprises (MSE) around China, for a YoY increase of 29.5%.
The average interest rate for financial inclusion MSE loans made in July was 4.93%, for a decline of 0.15 percentage points compared to the end of last year.
“At present, China’s economy is going through ongoing recovery and growth, and development momentum is further strengthening, but economic recovery remains unstable and imbalanced,” said Pan.
“The global pandemic continues to evolve, and the external environment is more complex. Raw materials and other prices for MSE’s remain unremittingly high, leading to a rise in production and operating costs, an increase in accounts receivable and other difficulties and problems.”
In future, PBOC will continue to “raise MSE financial services and support the development of micro, small and medium-sized enterprises,” as well as “further strengthen policy incentives and restraints, drive financial product and service innovations, improve internal resource allocation and policy arrangements of financial institutions and optimise the financial environment.”