China’s big state-owned banks are taking the lead in reducing rates for consumer loans, as regulators push for financial institutions to help drive growth in domestic consumption.
A report from the official news agency for China’s financial agencies indicates that rates for consumer loans have dropped beneath the 4% threshold in key parts of the country.
Banks in Beijing are using phone and text message marketing to promote consumer loans of up to 200,000 yuan with rates of as low as 3.8% to consumers in the Haidian district. This compares to rates on consumer loans from Beijing banks of at least 4.5% just a year previously.
Big state-owned lender Bank of China (BOC) has reduced the rates for its “BOC E Loan” (中银E贷) to 3.9% from 4.05% in March, and 4.32% during the Spring Festival last year. Fellow big state-owned lender China Construction Bank has cut the minimum rate for its “Kai Dai” (快贷) product to 4.05% from 4.35% previously.
Other big state-owned lenders have reduced rates for consumer lending even more, bringing them well beneath the 4% threshold. Industrial and Commercial Bank of China (ICBC) has cut its “Rong E Jie” (融e借) rate to 3.8%, while Agricultural Bank of China (ABC) has done the same for its “Wang Jie Dai” (网捷贷) loan product.
Some of the smaller joint-stock banks are also following suit, including China Merchants Bank, which has cut the rate for its “Shan Dian Dai” (闪电贷) loan to under 4% from 4.5% a year previously.