Dous­ing the flames Small firms get more help

China Daily (Canada) - - TOP NEWS - By ZHANG YUE

Lo­cal banks, once they qual­ify, will have dis­cre­tion on fi­nanc­ing small and mi­crobusi­nesses. Fi­nan­cial in­sti­tu­tions will not be al­lowed to cut fi­nanc­ing for such busi­nesses that are el­i­gi­ble for re­newed loans, and in­ap­pro­pri­ate fees will be scrapped for small and mi­crobusi­nesses.

More so­cial funds and fi­nan­cial in­no­va­tion will be en­cour­aged to sup­port the de­vel­op­ment of such busi­nesses.

“Fi­nanc­ing dif­fi­culty for small and mi­crobusi­nesses is a chal­lenge that must be taken care of,” Li said at the­meet­ing. “It is not risk-free. Yet we should not stop our ef­forts just be­cause of such risks. What must be done must be done.”

The new mea­sures come as the na­tion’s pri­vate busi­ness growth slows. Pri­vate in­vest­ment, mostly from small and mi­crobusi­nesses, al­lowed con­tributesto cut more fi­nanc­ing than for 60 such busi­nesses that are el­i­gi­ble for re­newed loans, and in­ap­pro­pri­ate fees will be scrapped for small and mi­crobusi­nesses.

More so­cial funds and fi­nan­cial in­no­va­tion will be en­cour­aged to sup­port the de­vel­op­ment of such busi­nesses.

“Fi­nanc­ing dif­fi­culty for small and mi­crobusi­nesses is a chal­lenge that must be taken care of,” Li said at the meet­ing. “It is not risk-free. Yet we should not stop our ef­forts just be­cause of such risks. What must be done must be done.” per­cent of China’s fixed as­set in­vest­ment and sup­ports em­ploy­ment for more than 80 per­cent of the work­force.

But this in­vest­ment grewby just 2.8 per­cent in the first six months of this year. A na­tion­wide re­view by the cen­tral gov­ern­ment found that the most com­mon rea­son was that small and mi­crobusi­nesses faced in­creas­ing dif­fi­cul­ties in ob­tain­ing loans from banks, hin­der­ing their in­vest­ment abil­ity.

Li Zibin, pres­i­dent of the China As­so­ci­a­tion of Small andMedium-Sized En­ter­prises, said atWed­nes­day’s meet­ing that fi­nanc­ing dif­fi­cul­ties re­main the top chal­lenge and the big­gest con­straint for the de­vel­op­ment of small and mi­crobusi­nesses, al­though the cen­tral gov­ern­ment has made tremen­dous ef­forts to sup­port them.

Premier Li said: “Ad­e­quate fi­nanc­ing for such busi­nesses is a com­mon chal­lenge glob­ally. All gov­ern­ment de­part­ments con­cerned should take con­crete mea­sures to sup­port the healthy de­vel­op­ment of small and mi­crobusi­nesses. This, in turn, is an ef­fec­tive way to pro­tect the fi­nan­cial sec­tor from such risks.”

Guo Tiany­ong, a pro­fes­sor of fi­nance at Cen­tralUniver­sity of Fi­nance and Eco­nomics, said: “Tra­di­tion­ally, fi­nan­cial in­sti­tu­tions are re­luc­tant to grant loans to small and mi­crobusi­nesses. How­ever, fi­nanc­ing dif­fi­cul­ties have hin­dered pri­vate in­vest­ment and such busi­nesses dur­ing the first half of this year, and so fa­vor­able poli­cies should be granted to them.”

But im­ple­ment­ing these poli­cies is a long process and pos­i­tive im­pacts will be seen when small and mi­crobusi­nesses con­tinue to get sup­port from fi­nan­cial in­sti­tu­tions, Guo added.

Dous­ing the flames

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