Caixin Weekly October 16
Thanks to technological innovation and policy support, China has been accelerating the pace to build an inclusive finance system in recent years. On September 27, a State Council executive meeting granted favorable policies to financial institutions that offer loans to small and micro businesses based on inclusive finance, such as targeted cuts to the required reserve ratio and exemption of value-added tax.
The concept of inclusive finance was introduced to China in 2005, a challenge to the conventional principle in financial circles that “20 percent of clients create 80 percent of value.”
So far, six big and medium-sized banks have set up special business departments to conduct professional operations involving inclusive finance. By the end of June, loans for small and micro businesses had reached 28.6 trillion yuan ($4.31 trillion), up 14.7 percent year on year. Across the country, there are now 11,000 small lenders and 1,519 town banks. Private banks are also involved in inclusive finance.
China’s decision-makers attach great importance to the growth of inclusive finance and particularly encourage micro loans.