Tar­geted mea­sures to boost sup­port for mi­cro, small firms

China Daily - - FRONT PAGE - By ZHANG YUE zhangyue@chi­nadaily.com.cn

China will make more tar­geted ef­forts to boost the fi­nan­cial sec­tor’s sup­port for the real econ­omy and ease fi­nanc­ing woes for small com­pa­nies, a State Coun­cil ex­ec­u­tive meet­ing chaired by Pre­mier Li Ke­qiang de­cided on Fri­day.

The meet­ing heard a re­port on de­liv­ery of the poli­cies re­gard­ing ac­ces­si­ble and af­ford­able fi­nanc­ing for mi­cro and small busi­nesses.

“All de­part­ments are en­cour­aged to take a mul­ti­pronged ap­proach, and we must waste no time in help­ing small com­pa­nies tackle their liq­uid­ity dif­fi­cul­ties,” Li said. “No loans ex­tended should be will­fully with­drawn.”

Greater ef­forts will be made to en­hance fi­nan­cial ser­vices for the pri­vate sec­tor, es­pe­cially mi­cro and small busi­nesses, those at­tend­ing the meet­ing agreed.

The fi­nanc­ing channels for small busi­nesses will be widened. The scope of qual­i­fied col­lat­eral of the medium-term lend­ing fa­cil­ity will be ex­panded to cover loans for mi­cro and small com­pa­nies with a credit quota of up to 10 mil­lion yuan ($1.44 mil­lion) per com­pany. Sup­port will be given to more such com­pa­nies for eq­uity and bond fi­nanc­ing.

Fi­nan­cial in­sti­tu­tions will be en­cour­aged to make their lend­ing busi­nesses to mi­cro and small en­ter­prises part of their in­ter­nal per­for­mance eval­u­a­tion, and to al­lo­cate cor­re­spond­ing in­cen­tive re­wards.

Ma­jor com­mer­cial banks were called upon to work hard to cut their av­er­age lend­ing rate by 1 per­cent­age point in the fourth quar­ter com­pared with the first quar­ter. Un­nec­es­sary pro­ce­dures and sur­charges in fi­nanc­ing will be re­moved. The meet­ing also called for ef­fec­tive mea­sures to prevent credit risks.

Au­thor­i­ties in the fi­nan­cial sys­tem will be en­cour­aged to take sub­stan­tive mea­sures to fur­ther tilt poli­cies in fa­vor of mi­cro and small en­ter­prises as well as other pri­vate com­pa­nies, Li said. The gov­ern­ment must also pro­vide sup­port in terms of guar­an­tee and tax­a­tion, he added.

The meet­ing also dis­cussed how to bet­ter lever­age the gov­ern­ment­man­aged guar­an­tee funds to make more fi­nan­cial re­sources avail­able to mi­cro and small com­pa­nies. It was de­cided at the meet­ing that sup­port­ing agri­cul­tural and ru­ral de­vel­op­ment as well as small com­pa­nies will be the pri­mary busi­ness of all gov­ern­ment-man­aged guar­an­tee and reguar­an­tee in­sti­tu­tions.

The Peo­ple’s Bank of China, the coun­try’s cen­tral bank, has con­ducted tar­geted cuts to the re­quired re­serve ra­tio four times this year, re­leas­ing liq­uid­ity of 2.3 tril­lion yuan. By the end of Septem­ber, out­stand­ing loans for mi­cro and small com­pa­nies to­taled more than 33 tril­lion yuan, up by 11.4 per­cent year-on-year.

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