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Banks seek support for small business loans
By Zhang Fengming |
March 3, 2010, Wednesday
|
Online Edition
Online Edition
BIG banks are urging regulators to grant tax breaks and relax regulations to boost credit to small businesses, which create the majority of China's jobs.
Ma Weihua, president of China Merchants Bank Co, Dong Wenbiao, chairman of China Minsheng Banking Corp and Yan Bingzhu, chairman of Bank of Beijing, all urged the government to further support lending to small businesses this week.
The three are all members of China's top political consultant body, which opened its third session of the 11th Chinese People's Political Consultative Conference today in Beijing.
"Lending from commercial banks is still the main financing avenue for small and medium companies in China," Ma said in a proposal. "More efforts should be made to guide banks' support to small businesses."
Bad loan ratios of small business credit is about three times the industry average. Banks are reluctant to extend credit to small business for small margins and lack of assets in collateral.
Ma said regulators should give more tax incentives, simplify the bad loans write-off procedure and offer supportive funds to encourage more banks to do small business credit, which bears higher risks.
Dong suggested lowering corporate income tax to 15 percent for small loans from the current 25 percent.
Ma Weihua, president of China Merchants Bank Co, Dong Wenbiao, chairman of China Minsheng Banking Corp and Yan Bingzhu, chairman of Bank of Beijing, all urged the government to further support lending to small businesses this week.
The three are all members of China's top political consultant body, which opened its third session of the 11th Chinese People's Political Consultative Conference today in Beijing.
"Lending from commercial banks is still the main financing avenue for small and medium companies in China," Ma said in a proposal. "More efforts should be made to guide banks' support to small businesses."
Bad loan ratios of small business credit is about three times the industry average. Banks are reluctant to extend credit to small business for small margins and lack of assets in collateral.
Ma said regulators should give more tax incentives, simplify the bad loans write-off procedure and offer supportive funds to encourage more banks to do small business credit, which bears higher risks.
Dong suggested lowering corporate income tax to 15 percent for small loans from the current 25 percent.
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