June 29 2020

Eight Authorities Issue Guidelines to Strengthen Financial Services for SMEs and Micro Enterprises

Announcement by Multi-authorities

Eight authorities including the People's Bank of China and China Banking and Insurance Regulatory Commission recently released the Guidelines about Further Strengthening Financial Services for SMEs and Micro Enterprises. The document proposed 30 policy measures from such aspects as implementing loan support policies to facilitate resumption of work and production and enhancing commercial banks' financial service capacity for SMEs and micro firms.

According to the document, large banks with national branch networks should play the leading role and offer an interest rate discount of at least 50 basis points; five large state-owned banks should increase loans to small and micro firms by at least 40% from a year ago, while development and policy banks should grant 350 billion yuan in special credit loans; insurance companies are encouraged to develop guaranteed insurance products against the risk of loan defaults. The document also set objectives to improve external policy environment for the banking industry and strengthen the role of the capital market in providing financing channels.