China banks, insurers raise support for MSES

“We used digital technologies to enhance our capabilities to serve small businesses and ensure that our funds will arrive at MSES directly and precisely.” Liao Lin

BEIJING: Chinese banks and insurers have ramped up financial support for micro and small enterprises (MSES) and self-employed individuals as they have been facing a significant increase in difficulties since the beginning of this year.

To help market entities tide over tough times, the Industrial and Commercial Bank of China Ltd (ICBC), the country’s largest state-owned commercial lender by assets, saw its outstanding balance of inclusive loans rise 43% year-on-year at the end of the first quarter.

First-time borrowers accounted for about 40% of the bank’s new MSE clients in the first quarter.

The comprehensive financing cost of MSES at the bank fell 60 basis points from the previous year, said Liao Lin, vice-chairman and president at ICBC, at a news conference.

Ever since the Covid-19 pandemic first hit in Wuhan, Hubei province, ICBC has deferred repayments on principal and interest, which involves a loan principal of more than 400 billion yuan (Rm262bil) for 265,000 MSES whose total credit lines are up to 10 million yuan (Rm6.5mil) per borrower.

Since the beginning of this year, the bank has deferred repayments on the principal of 68.2 billion yuan (Rm45bil) for 31,000 MSES.

“We used digital technologies to enhance our capabilities to serve small businesses and ensure that our funds will arrive at MSES directly and precisely,” Liao said.

“With the help of data and credit of core enterprises in supply chains, our bank granted unsecured loans to upstream and downstream MSES to help them lower financing costs and improve the utilisation efficiency of funds.

“So far, we have adopted digital solutions that offer financing for over 2,300 supply chains in a number of industries including agriculture, healthcare and logistics,” he said.

— China Daily/ann