China’s Pre­mier says loans to small firms should not be ‘will­fully with­drawn’

Iran Daily - - Global Economy -

China’s pre­mier said loans to small firms should not be ‘will­fully with­drawn’, and China should help small firms tackle their liq­uid­ity dif­fi­cul­ties, the of­fi­cial Xin­hua news agency re­ported.

His com­ments are the lat­est from China’s lead­er­ship about ef­forts to prop up small and medium en­ter­prises (SMES), which are flail­ing in the face of a wider clam­p­down on riskier credit, a slow­down in eco­nomic growth and the es­ca­lat­ing trade war be­tween the United States and China, Reuters wrote.

“Gov­ern­ment de­part­ments are en­cour­aged to take mul­ti­pronged ap­proach,” Chi­nese Pre­mier Li Ke­qiang said dur­ing a cab­i­net meet­ing on Fri­day, Xin­hua said.

“No loans ex­tended should be will­fully with­drawn,” he said.

China will adopt more tar­geted mea­sures to boost the fi­nan­cial sec­tor’s sup­port for the real econ­omy and tackle fi­nanc­ing dif­fi­cul­ties for small and mi­cro busi­nesses, the State Coun­cil’s meet­ing, chaired by Li, de­cided.

Li fo­cused on the im­por­tance of clear meth­ods to im­ple­ment the as­sis­tance for SMES and mea­sures to en­cour­age fi­nan­cial in­sti­tu­tions to in­crease their loans to SMES and cut their fi­nanc­ing costs, said Xin­hua.

Ma­jor com­mer­cial banks were called upon to cut their av­er­age lend­ing rate for SMES by one per­cent­age point in the fourth quar­ter, com­pared with the first quar­ter, and re­move un­nec­es­sary pro­ce­dures and sur­charges for fi­nanc­ing, Xin­hua said.

The Peo­ple’s Bank of China, the cen­tral bank, has cut the re­quired re­serve ra­tio for com­mer­cial banks four times this year, re­leas­ing 2.3 tril­lion yuan ($330.68 bil­lion).

By the end of Septem­ber, out­stand­ing loans for mi­cro and small firms hit over 33 tril­lion yuan — up 11.4 per­cent on-year. Col­lat­eral that qual­i­fies for use in the medium-term lend­ing fa­cil­ity will be ex­panded to cover loans for SMES with a credit quota of up to 10 mil­lion yuan per com­pany, added Xin­hua. Sup­port will be given to firms for eq­uity and bond fi­nanc­ing. Fi­nan­cial in­sti­tu­tions will be en­cour­aged to make SME lend­ing part of their in­ter­nal per­for­mance eval­u­a­tions and pro­vide in­cen­tives to do so, the Xin­hua re­port said. The meet­ing also dis­cussed ways to use gov­ern­ment-man­aged guar­an­tee funds to make more fi­nan­cial re­sources avail­able to SMES.

JASONLEE/REUTERS

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