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City comes to the aid of smaller companies
By Winny Wang |
September 29, 2009, Tuesday
|
Print Edition
Print Edition
SHANGHAI is committed to helping smaller companies that are often denied bank loans to list on mainland stock markets to help them raise funding needed for expansion, a city official said yesterday.
"We expect that 10 percent of small and medium-sized enterprises that list on the mainland will be from Shanghai," said Zhou Minhao, secretary-general of the Shanghai Economic and Information Committee.
China's securities regulatory has approved five small and medium companies in the city to list on the mainland so far this year, and more than 20 companies are in the application line for initial public offerings.
"If the candidates are approved, the number of local firms launching IPOs this year will exceed the volume from 2004 to 2008," Zhou said.
About 349,000 small and medium companies provide more than 80 percent of jobs in the city, and their sales account for nearly 60 percent of business revenue in Shanghai.
The figures are in line with national statistics on the role smaller companies play in the economy.
Still, mainstream banks are often reluctant to provide smaller entrepreneurs with financing because they usually don't have solid track records and the smaller loans they seek don't generate big profits.
Last November, Shanghai set up the first special lending institution to provide small business loans of 500,000 yuan (US$73,300) or less.
The 30 lenders in operation by the end of August had extended loans totaling about 2 billion yuan.
Today there are 41 small-business lenders who have flexibility on setting interest rates. Loans are limited to companies with annual sales of 300 million yuan or less.
The city government is holding a meeting with the China Association of Small and Medium Enterprises this week to discuss innovation and opportunities for smaller companies.
The city's actions are in response to a national call for more stimulus policies to help ailing small businesses ride out the financial crisis.
The State Council, China's Cabinet, last week unveiled a blueprint for boosting small and medium companies. It called for cutting taxes, encouraging private capital and promoting training.
"We expect that 10 percent of small and medium-sized enterprises that list on the mainland will be from Shanghai," said Zhou Minhao, secretary-general of the Shanghai Economic and Information Committee.
China's securities regulatory has approved five small and medium companies in the city to list on the mainland so far this year, and more than 20 companies are in the application line for initial public offerings.
"If the candidates are approved, the number of local firms launching IPOs this year will exceed the volume from 2004 to 2008," Zhou said.
About 349,000 small and medium companies provide more than 80 percent of jobs in the city, and their sales account for nearly 60 percent of business revenue in Shanghai.
The figures are in line with national statistics on the role smaller companies play in the economy.
Still, mainstream banks are often reluctant to provide smaller entrepreneurs with financing because they usually don't have solid track records and the smaller loans they seek don't generate big profits.
Last November, Shanghai set up the first special lending institution to provide small business loans of 500,000 yuan (US$73,300) or less.
The 30 lenders in operation by the end of August had extended loans totaling about 2 billion yuan.
Today there are 41 small-business lenders who have flexibility on setting interest rates. Loans are limited to companies with annual sales of 300 million yuan or less.
The city government is holding a meeting with the China Association of Small and Medium Enterprises this week to discuss innovation and opportunities for smaller companies.
The city's actions are in response to a national call for more stimulus policies to help ailing small businesses ride out the financial crisis.
The State Council, China's Cabinet, last week unveiled a blueprint for boosting small and medium companies. It called for cutting taxes, encouraging private capital and promoting training.
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