Inclusive Fi­nance

Caixin Weekly Oc­to­ber 16

Beijing Review - - This Week People & Points -

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.

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