Insurer signs small-loan guarantee deal
Print Edition
THE Shanghai branch of China Pacific Insurance yesterday became the first company in China to provide a financial guarantee insurance policy for a small-loan agreement, as authorities continue to work to make funding more available to the private sector.
Under the deal, China Pacific will insure a 1 million yuan (US$161,000) loan by Da Zhong Micro-Credit Co to Shanghai Twisun Bio-Pharm Co.
Such policies were previously offered only to banks, but both the Shanghai Association of Micro-Credit and Shanghai Financial Services Office supported the deal.
By removing much of the risk to micro-credit firms, it is hoped the new policy will facilitate more lending to small firms, they said.
Under the deal, Twisun will pay China Pacific a premium equivalent to 3 percent of the value the loan. In turn, Da Zhong will charge Twisun a reduced interest rate to offset the cost of the premium.
China Pacific said that in view of the higher risks associated with lending to small firms, it has set an initial cap of 1 million yuan on loans that can be covered by the new policy.
Wu Jun, deputy director of the Shanghai Financial Services Office, said: “We are making a concerted effort to make funding more available to small firms, and will encourage more insurers, small-loan companies and borrowers to engage in such deals.”
Yang Guoping, head of the Shanghai Association of Micro-Credit, said about a third of the city’s 120 or so micro-credit companies are in need of financial insurance products.
Lenders and insurers should work together to facilitate the smooth introduction of such products, he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
