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Lenders to boost support to SMEs

CHINA has directed its national lenders to set up special subsidiaries to cater to small- and medium-sized enterprises and boost credit support to them, a senior banking regulator told the Lujiazui Forum yesterday.

The country's big five state-owned lenders and joint-stock banks must set up separate departments to provide services to SMEs by the second quarter, said Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission.

"The banking regulator places high importance in boosting financial support to SMEs, especially high-tech start-up firms," Jiang said. "In particular, we encourage smaller lenders to shift their business focus to SMEs to avoid competition with big lenders for big clients."

Banking executives attending the forum yesterday called for more government policies to help lenders reduce costs for loans to SMEs and curb risks.

Ma Weihua, president and chief executive officer of China Merchants Bank, suggested that the government should give preferential tax policies to banks that are willing to give more credit to SMEs.

"The costs and risks of lending to SMEs are higher than to large clients," said Ma. "Favorable government polices on this aspect will surely be encouraging to commercial lenders."

Ma said China Merchants Bank had already reached initial agreements with the governments of several cities in Jiangsu Province who are willing to share bank risk in lending to SMEs.

Hu Pingxi, chairman of Shanghai Rural Commercial Bank, suggested that the government should study plans to allow smaller commercial lenders to conduct private equity business to help SMEs raise capital.


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