One of China’s big three policy banks has stepped up lending to high-quality private businesses, amidst a push from Chinese regulators for greater financial inclusion.
As of the end of September China Development Bank (CDB) had made 13.1 billion yuan in loans to “special new” small-and-medium sized enterprises (专精特新中小企业) since the start of 2022, according to a report from China Securities Journal.
These included 44 enterprises categorised as national-level “small giants”, and 71 provide-level special new SMEs.
According to CDB these loans were concentrated in key areas including information technology, high-end manufacturing, clean energy and new materials. CDB also highlighted efforts to reduce the cost of funds for SMEs by means preferential discount policies launched as part of special campaigns in cities such as Beijing and Suzhou.
CDB is far from the only bank to step up efforts to target high-quality SMEs, with Chinese regulators pushing for greater financial inclusion to provide stronger support to small businesses amidst a period of heightened economic uncertainty.
“At present there are already some banks that are formulating special financial products that better suit the financing needs of small and medium-sized tech enterprises,” said Dong Ximiao (董希淼), a financial expert from Fudan University, to China Securities Journal.
In order to better resolving the financing challenges of promising SMEs in China, Dong called for banks to remove their excess “superstitious belief” in collateral guarantees, as well as to make greater use of intellectual property such as brands and patents as collateral for financing.