More finance for businesses

China will introduce measures to make financing more accessible and affordable for small and micro businesses, the State Council decided at an executive meeting chaired by Premier Li Keqiang on June 20.

The country will continue to adopt a prudent and neutral monetary policy and the government will work to keep liquidity sufficient and appropriate, maintain financial stability, strengthen policy coordination to boost market confidence and ensure the economy performs within a reasonable range.

According to a decision at the meeting, the volume of re-financing and re-discounts for small and micro businesses, and for rural areas, agriculture and farmers will be raised. The re-financing interest rates for small and micro businesses will be lowered.

Between Sept 1 this year and the end of 2020, the credit quota for small and micro businesses with loans that are eligible for VAT exemptions on interest revenue will be raised from 1 million to 5 million yuan ($153,000-$768,000).

Meanwhile, the State financing guarantee fund will cover no less than 80 percent of the financing guarantee for small and micro businesses.

Monetary tools will be applied to raise credit support for small and micro-businesses. Targeted cuts in bank reserve requirement ratios and other monetary policy tools will be used to boost credit supply to small and micro businesses.