The People’s Bank of China (PBOC) says it will guide domestic financial institutions to provide greater financial support to innovative tech companies in China via a new reloan facility.
PBOC said it has launched the tech innovation reloan facility for the purpose of “guiding financial institutions to expand the intensity of support for tech innovation, and to drive social capital to drive tech innovation.”
“PBOC is using tech innovation reloans to provide low cost funds to financial institutions, and guide financial institutions to make loans to tech enterprises,” said a PBOC official at a press conference held on 28 April.
The tech innovation reloan quota has been set at 200 billion yuan, with an interest rate of 1.75% and a term of one year, as well as two permitted extensions.
Under the scheme PBOC will provide tech innovation reloan funds for 60% of the principal of tech enterprise loans with a term of six months or more.
The facility will be available to a total of 21 financial institutions, including policy banks, state-owned commercial banks, joint-stock banks and the Postal Savings Bank of China, with PBOC accepting applications for reloans from the start of April.
The scope of supported enterprises will include “new hi-tech enterprises” and “specialised and new” small and medium-sized enterprises, as well as national tech innovation demonstration enterprises and manufacturing sector “champion” enterprises.
PBOC said that preferential support will be given to enterprises that are “small giants,” as well as enterprises participating in national tech plan projects and national manufacturing sector innovation centres.