Big state-owned lender Banks of Communications (BOCOM) has announced more than a dozen measures to drive lending to micro-and-small enterprises (MSE) in China in response to calls from the Chinese central government for greater financial inclusion and economic stabilisation.
On 17 June BOCOM announced the release of the “Opinions on Driving the Establishment of Long-term Mechanisms for Financial Services to Micro-and-Small Enterprises, and Daringness, Willingness and Ability to Make Loans” (于推动建立金融服务小微企业敢贷愿贷能贷会贷长效机制的意见).
The Opinions outline a total of 14 measures to “continually increase the willingness, ability and sustainability of services for micro-and-small enterprises, ensure growth in loans for micro-and-small enterprises and individual industrial and commercial registrants, and help to stabilise market entities, stabilise employment and entrepreneurship, and stabilise economic growth.”
Specific measures include:
- Further increasing the effectiveness of disposal of non-performing loans.
- Providing greater risk tolerance for financial inclusion micro-and-small loans as compared to overall loans.
- Making comprehensive use of cash clearance, restructuring, litigation, transfers and write-offs and other methods to strengthen risk disposal.
- Expanding support for fee reductions and wealth transfers.
- Ensuring that interest rates for new financial inclusion loans to MSE’s in 2022 further decline compared to 2021.
- Improvements to assessment and review indices.
- Continuing to improve the online product range.
- An increase in the MSE financial bond issuance scope of 50% compared to 2021, with a planned total of 60 billion yuan in issues in 2022.
- Strengthening loan supply guarantees for north-eastern and north-western China.