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February 21, 2020

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Banks to the rescue of firms

FINANCIAL institutions in Shanghai have taken measures to help enterprises resume work during the novel coronavirus epidemic.

Banks in the city have increased special credit support for key areas, actively implementing the special refinancing policies of the central bank, according to Li Jun, Shanghai Financial Supervision Administration deputy director.

As of February 18, banks in Shanghai had granted 90 loans totaling 1.31 billion yuan (US$187.7 million) to 48 key enterprises, with a weighted average interest rate of 2.35 percent. With a central financial subsidy of 50 percent, the actual financing costs for enterprises can be much less than 1.6 percent. Of this, national banks issued 670 million yuan in Shanghai branches while local corporate banks issued 640 million yuan.

Most of these loans were disbursed within a day, up to a maximum of two days, and were focused on key areas related to epidemic control such as material production, equipment manufacturing and procurement of medical supplies, Li said.

At the same time, the Shanghai headquarters of the central bank increased its support by using tools such as rediscounts, with a total of 110 million yuan having been rediscounted by February 18.

Meanwhile, the city has released additional funds that will be lent to companies affected by the outbreak. To date, 54 banks in Shanghai have injected a total of 17.6 billion yuan in epidemic prevention and control loans, offering support to 1,796 firms, with the overall cost of loans being around 3.62 percent.

For the 4,360 seriously affected enterprises, about 350 million yuan in loan interest and service charges were reduced or waived.


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