By Shang Kaiyuan from People’s Daily
Financial support for micro and small, as well as private enterprises is the most important part of supply-side structural reform in the financial sector, according to Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC).
Guo made the remarks when giving an interview after the opening meeting of the second session of the 13th National People’s Congress at the Great Hall of the People in Beijing on Mar. 5.
Calling the financing difficulty and the high financing cost for micro and small enterprises a tough challenge of the world, Guo made high evaluation on China’s efforts in this regard.
There are 4,588 financial organizations in China’s banking industry, he introduced, adding that major banks’ share in the industry was reduced to around 38 percent from over 50 percent over the past decade.
The fall of share of major banks was a synchronous process with the expanding number of small- and medium-sized banks whose businesses were more tailored for micro and small enterprises, Guo noted.
In addition, major banks, including five largest State-owned commercial banks and 12 joint-stock commercial banks, have all established inclusive finance departments to provide financial services specifically for micro and small enterprises, he said.
Reports confirmed that by the end of 2018, China witnessed a 21.8-percent growth from the year beginning in the inclusive loans for micro and small enterprises with a total credit line not exceeding 10 million yuan ($1.5 million) for each borrower. “It’s indeed a high growth,” Guo noted.
According to this year’s government work report, state-owned banks are requested to grant 30 percent more of the loans to small and micro businesses, which is an approachable target in Guo’s view.
Chinese banks have made effective explorations on how to acquire sufficient information before offering loans to private, as well as micro and small enterprises, a big challenge for many financial institutions, Guo introduced.
Thanks to the application of big data and internet, some banks are able to respond quickly to lending demands and keep a low ratio of non-performing loans (NPL). For instance, the NPL ratio of China Construction Bank was kept at only round 1 percent. In addition, the leading online private commercial bank MYbank was also keeping a low NPL ratio, Guo said.
“We will further share and promote these experiences among banks of all sizes, and take more measures to support the development of the private, as well as micro and small businesses,” Guo remarked.
As supply-side structural reform deals with many aspects, insurance and security sectors also need to carry out bold innovation to offer more financial support for the private sector, and micro and small enterprises, Guo stressed.