China's State Council has called on local governments to support micro- and small enterprises in their information integration efforts to remove obstacles preventing financial institutions from providing loans to such companies. Li Dong has the details.

 

　　The government made the call via the issuance of a guideline, urging financial institutions to support economic restructuring, upgrading and transitioning.

 

　　According to the guideline, China's central bank will help financial institutions make loans available to micro- and small-enterprises in the labor-intensive, agricultural, advanced manufacturing and information technology sectors.

 

　　The guideline encourages local governments to set up credit risk compensation funds for small enterprises and support the integration of their information. These positive policies aim to remove the obstacles that obstruct banks from providing loans to small enterprises.

 

　　An automation technology company in Shanghai previously relied on borrowing money from loan sharks, as it was unable to meet the bank's requirements. But it has recently obtained a loan of 4 million yuan through the financial service platform in the Pudong New Area. Han Judi, the manager of the company recalls its past sufferings.

 

　　"The interest rate was set at 1/8th on loans from loan sharks, or 3/8th for short-term loans calculated on a daily basis. It was 4,000 yuan per day, and we borrowed for 60 days."

 

　　Yang Lifa is an official at Shanghai's Pudong New Area Financial Services Bureau

 

　　"Now a dozen banks in Shanghai are providing more than 50 kinds of loans to science and technology enterprises. This enterprise, for instance, has been certified as a high-tech enterprise and therefore qualified for getting more credit lines."

 

　　Shanghai began to set up and improve its financial service starting from the latter half of 2012. It has now established such financial services in all the 17 districts and counties under its jurisdiction. Tu Guangshao is the vice mayor of Shanghai.

 

　　"The financial service platform serves as a bridge between small enterprises and the financial service. To make the traffic on the bridge smooth, we have to remove two obstacles: inadequate information and inadequate loans."

 

　　The guideline also encourages private capital to flow into the financial sector, follow market interest rates, and guarantee loans to key infrastructure projects.

 

　　The State Council reiterated that it will maintain a prudent monetary policy and a reasonable money and credit scale to support economic restructuring, after a cash crunch sent inter-bank borrowing rates to record highs in June.

 

　　This policy will enable small enterprises to acquire sufficient loans from banks rather than loan sharks.

 

　　For CRI, I am Li Dong.