Economic Policy News
- China to mull unified classification criteria for smaller businesses
Date: 14-Mar-2007 Sources: (Xinhua Online)
The China Banking Regulatory Commission (CBRC) is considering a unified classification criteria to define smaller enterprises, as a step forward in its efforts to make it easier for such businesses to get bank loans.
Also on CBRC's agenda for the year are loan classification approach, reserve ratio, bad loan writing-off method and an accountability system, which are tailored to smaller enterprises, Wang Zhaoxing, assistant to the chairman of the industry watchdog,said on Tuesday.
According to Wang, by the end of 2006 loans outstanding from smaller enterprises at banking institutions nationwide stood at 5.3 trillion yuan (6,944 billion U.S. dollars), an increase of 539.6 billion yuan (70 billion U.S. dollars), or 15.8 percent higher than at the beginning of the year.
Mon-performing loans to small enterprises dropped 5.1 percentage points to 19.3 percent.
Of the total loans outstanding to smaller enterprises, those extended by local banking institutions made up 2.7 trillion yuan (3,560 billion U.S. dollars), an increase of 22.5 percent from the2.2 trillion yuan (2,906 billion U.S. dollars) at the beginning of the year. The NPL ratio against smaller enterprises decreased 5.4 percentage points to 15.7 percent.
Many banks are still reluctant to lend to smaller enterprises, as they expect small, insignificant returns from such businesses.
Wang Zhaoxing said this year CBRC would improve its assessment system for banking services to smaller enterprises.
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