Bei­jing im­proves SME’s en­vi­ron­ment

China Daily (Latin America Weekly) - - 13 Business - By LIU YUKUN in Bei­jing li­uyukun@chi­

The fi­nan­cial guar­an­tee process has been largely short­ened for Bei­jing-based small and medium-sized busi­nesses, which also en­joyed a re­duced guar­an­tee cost thanks to a re­cent plan re­leased by Bei­jing Mu­nic­i­pal Bureau of Fi­nan­cial Work, as part of the Bei­jing mu­nic­i­pal gov­ern­ment’s ef­forts to foster a bet­ter busi­ness en­vi­ron­ment.

“Some small com­pa­nies and star­tups have re­ally good ideas and promis­ing busi­ness mod­els, but they of­ten get re­jec­tions from banks and guar­an­tee ser­vice providers due to lack of money or in­suf­fi­cient credit build­ing,” said Guo Hong, chair of Bei­jing Zhong­guan­cun Bank Corp Ltd, the first pri­vately owned bank in China that pro­vides fi­nan­cial-guar­an­tee ser­vices to small busi­nesses and star­tups.

The plan, ef­fec­tive March 15 and dubbed “Opin­ions on Fur­ther Op­ti­miz­ing the Fi­nan­cial Credit Busi­ness En­vi­ron­ment”, cov­ers 14 mea­sures pro­mot­ing in­no­va­tions to the cur­rent guar­an­tee mech­a­nism and fi­nan­cial ser­vices to lo­cal res­i­dents.

The mea­sures in­clude en­cour­ag­ing cap­i­tal guar­an­tee ser­vice providers to re­duce guar­an­tee costs, short­en­ing eval­u­a­tion pro­cesses and strength­en­ing the cur­rent credit eval­u­a­tion sys­tem, thereby fa­cil­i­tat­ing a smoother eval­u­a­tion process.

Huang Wei, deputy gen­eral man­ager of Bei­jing Cap­i­tal Guar­an­tee & In­vest­ment Co Ltd, said his firm is co­op­er­at­ing with the In­dus­trial and Com­mer­cial Bank of China to build an on­line credit-eval­u­a­tion plat­form for data shar­ing.

Pre­vi­ously, ap­pli­cants needed to be eval­u­ated twice both by cap­i­tal guar­an­tee com­pa­nies and banks. The plat­form now al­lows a one-time eval­u­a­tion process work­ing for both sides.

In ad­di­tion to rais­ing busi­ness ef­fi­ciency, mea­sures to re­duce costs have also been car­ried out by many other Bei­jing based cap­i­tal-guar­an­tee com­pa­nies.

Bei­jing SMEs Cred­its Reguar­an­tee Co Ltd, for ex­am­ple, is work­ing on an as­so­ci­a­tion that has in­vited more than 300 IT and cul­tural re­lated star­tups to join. The as­so­ci­a­tion guar­an­tees a lower cost — lim­ited to 2 per­cent of their loans — charged to its mem­bers for ser­vices from guar­an­tee com­pa­nies.

“We are tak­ing mea­sures to fa­cil­i­tate the re­duc­tion on fi­nanc­ing guar­an­tee cost, and mean­while we are work­ing on mak­ing the process quicker and eas­ier, es­pe­cially for star­tups and small busi­nesses that lack suf­fi­cient fi­nan­cial sup­port,” said Qin Kai, chair of SMEs.

Up to now, SMEs has sup­ported more than 59,000 small to medium-sized busi­ness.

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