Global EditionASIA 中文雙語Fran?ais
    Business
    Home / Business / Finance

    More funding sources beckon smaller firms

    By Jiang Xueqing | China Daily | Updated: 2020-06-10 08:08
    Share
    Share - WeChat
    A teller counts cash at a bank branch in Hangzhou, capital of East China's Zhejiang province. [Photo by Hu Jianhuan/For China Daily]

    Banks will serve as bridges connecting enterprises and financing channels

    China will strive to provide more funding sources for small businesses and look to lower the financing costs via financial bonds for micro and small enterprises.

    During the first five months of this year, 23 commercial banks issued 275.28 billion yuan ($38.9 billion) of financial bonds for micro and small enterprises. Most of the bonds have a three-year term and their coupon rates vary from 1.99 percent to 4 percent, according to Wind, a financial data provider in China.

    Funds raised from such bonds are exclusively used for lending to micro and small businesses.

    Medium to small-sized banks are usually the main issuers of such bonds. During the first five months of this year, 16 of the issuers were city and rural commercial lenders. Compared with last year, more national joint-stock commercial banks and even large State-owned commercial banks have actively participated in the issuance of such bonds, as the government has urged large banks to step up lending to small businesses.

    Premier Li Keqiang said in the Government Work Report that large commercial banks should increase inclusive finance lending to micro and small businesses by more than 40 percent this year.

    Agricultural Bank of China Ltd and Bank of China Ltd, two large State-owned commercial lenders, issued 20 billion yuan and 10 billion yuan worth of three-year financial bonds respectively for micro and small enterprises during the first five months of this year at coupon rates of 1.99 percent and 2.65 percent.

    The funds raised by Agricultural Bank of China will be used for lending to small businesses in Hubei province and other regions that suffered due to the novel coronavirus outbreak.

    Industrial Bank Co Ltd, a Fuzhou-headquartered national joint-stock commercial lender, issued altogether 57 billion yuan of financial bonds for small businesses in the first five months. It will use the funds raised to support work resumption and production at small businesses.

    Banks' issuance of financial bonds targeting micro and small enterprises increased significantly from the same period of last year when 12 banks issued 88.5 billion yuan of such bonds.

    The State Council said in a meeting on March 31 that the government will support financial institutions in the issuance of 300 billion yuan of financial bonds targeting micro and small enterprises.

    By issuing this type of bonds, banks will serve as bridges between small businesses and capital markets, further expand the sources of funding for micro and small enterprises, and improve diversified mechanisms for small business financing, bankers and analysts said.

    "The issuance of financial bonds is a way for small and medium-sized banks to seek funding sources. It will reduce the cost of debt for small and medium-sized banks, as interest rates are lower than before in the bond market, and will effectively lower financing costs of micro and small businesses," said Wen Bin, chief analyst at China Minsheng Banking Corp.

    Wen highlighted the need for financial institutions to have a countercyclical mindset.

    "When the times get tough, banks should not simply reduce lending to businesses, collect debt in advance or stop lending, for their asset quality will get even worse if their clients' risks increase more rapidly due to a shortage of funds," he said.

    Risk exposure of micro and small enterprises has heightened because of the pandemic and the economic downturn.

    Xiao Yuanqi, chief risk officer of the China Banking and Insurance Regulatory Commission, said on April 22 the current nonperforming loan ratio of banks in China was 2.04 percent, up 0.06 percentage point from the beginning of this year. In particular, the NPL ratio of small businesses that were severely affected by the pandemic increased more rapidly than other businesses.

    It is estimated that the NPL ratio will continue to rise in the second quarter but regulators do not expect to see a large increase, for the government is carrying out work and production resumption in an orderly manner and has taken a number of hedging measures to mitigate risks, Xiao said.

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    CLOSE
     
    天堂а√在线中文在线最新版 | 亚洲Av无码乱码在线播放| 亚洲AV无码乱码在线观看性色扶| 免费无码H肉动漫在线观看麻豆| 亚洲AV中文无码乱人伦| 国产色无码专区在线观看| 漂亮人妻被中出中文字幕久久| 精品久久久无码人妻中文字幕豆芽| 人妻少妇AV无码一区二区| 欧美日本中文字幕| 亚洲爆乳精品无码一区二区| 亚洲Av无码专区国产乱码DVD| 最近中文字幕精彩视频| 中文字幕乱妇无码AV在线| AV成人午夜无码一区二区| 欧洲Av无码放荡人妇网站 | 亚洲av无码国产精品色午夜字幕| 日韩精品中文字幕第2页| 中文字幕国产在线| 亚洲无av在线中文字幕| 亚洲色成人中文字幕网站| 亚洲一本大道无码av天堂| 久久久久亚洲AV无码专区体验| 亚洲AV无码欧洲AV无码网站| A级毛片无码久久精品免费| 丝袜无码一区二区三区| 无码H黄肉动漫在线观看网站| 无码av中文一二三区| 久久亚洲中文字幕精品一区四| 亚欧无码精品无码有性视频| 久久精品无码av| 亚洲成av人片在线观看天堂无码 | 丰满岳乱妇在线观看中字无码| 少妇人妻偷人精品无码视频 | 国产精品成人无码久久久久久 | 18禁无遮拦无码国产在线播放 | 久久精品中文字幕无码绿巨人| 亚洲中文字幕久久精品无码喷水| 波多野结衣在线中文| 日韩中文字幕在线播放| 亚洲中文字幕丝袜制服一区|