China Issues Guidelines to Accelerate SME Development

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Aug. 22 – China’s State Council released the “Opinions on Financial Support to the Development of Small and Micro-sized Enterprises (guobanfa [2013] No.87, hereinafter referred to as ‘Opinions’)” on August 8, which put forward eight specific financial measures to support the development of small and micro-sized enterprises in the country. Detailed information can be found below.

Financial Supporting Measures

Realizing the objectives set up for the rate and amount of loan growth

Under the premise of overall controllable risks, the growth rate of loans provided to small and micro-sized enterprises shall not be lower than the average growth rate of all types of loans and the amount of growth shall not be lower than the level of the corresponding period of last year.

(Handled by the People’s Bank of China and the China Banking Regulatory Commission)

Enriching and innovating the ways of financial services

Financial institutions shall constantly develop specialty products based on the characteristics of small and micro-sized enterprises of different types and in different development stages, and provide them with tailor-made financial products and services.

Insurance institutions are encouraged to provide funding support to the development of small and micro-sized enterprises by investing in enterprise equity, funds, claims, and asset schemes, or by other means.

(Handled by the People’s Bank of China, the China Banking Regulatory Commission and the China Securities Regulatory Commission)

Reinforcing credit enhancement services and information services

The establishment of a new mechanism shall be accelerated, under which small and micro-sized enterprises, information and credit enhancement service agencies, and commercial banks will share the benefits and risks together.

An integrated information sharing platform for small and micro-sized enterprises to integrate the following information resources shall be established:

  • Registration;
  • Labor;
  • Production and operation;
  • Talent and technology;
  • Payment of taxes and fees;
  • Water and electricity consumption;
  • Energy conservation and environmental protection; and
  • Other information resources.

(Handled by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Commerce and other relevant departments)

Developing small-sized financial institutions

The types of financial service institutions for small and micro-sized enterprises shall be further enriched, and support shall be given to establish village or township banks, loan companies, and other small-sized financial institutions in regions where small and micro-sized enterprises are concentrated.

Private investors shall be encouraged to establish private banks, financial leasing companies, consumer finance companies, and other financial institutions that are responsible for their own risks.

Large and medium-sized banks are encouraged to accelerate the development of specialized agencies for small and micro-sized enterprises and extend service outlets to lower levels, so as to raise the volume and scale of financial services for such entities.

(Handled by the China Banking Regulatory Commission)

Expanding direct financing channels

Financial thresholds for innovation-oriented or growth-oriented enterprises to be listed on the Growth Enterprise Market shall be appropriately relaxed.

Efforts shall be made to establish and improve the national transfer system for shares of small and micro-sized enterprises and to increase the varieties of financing products suitable for such entities.

(Handled by the China Banking Regulatory Commission, the National Development and Reform Commission and other relevant departments)

Lowering financing costs

Small and micro-sized enterprises shall continue to be exempted from administrative and institutional fees under the management, registration and licensing categories.

(Handled by the People’s Bank of China and other relevant departments)

Stepping up policy support for financial services

Banking financial institutions are encouraged to moderately raise the tolerance of non-performing loans of small and micro-sized enterprises, and adjust performance appraisal mechanisms accordingly.

(Handled by the National Development and Reform Commission and other relevant departments)

Creating a favorable environment for the development of financial services

Moreover, the Opinions provide that all provincial-level people’s governments shall, by the end of January of each year, report the following to the State Council starting from 2014:

  • The general situations, achievements and problems of financial services for small and micro-sized enterprises in their respective regions in the preceding year; and
  • Plans for the next stage and relevant suggestions.

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