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Plans to lift small loan firms, businesses
By Zhang Fengming |
February 13, 2009, Friday
|
Print Edition
Print Edition
SHANGHAI is drafting guidelines on ways to help small businesses and is also setting up an industry association which will back the interests of small-credit companies, the city's financial office said yesterday.
The city will help small-credit companies to develop their lending system and offer preferential policies to help the industry, the Shanghai Financial Services Office said, without giving more details. Shanghai is expanding the trial scheme on small-credit companies from 10 rural-related districts to the rest of the city.
Shanghai has approved the set-up of 23 small-credit companies, of which 14 have started operations. Since the first such firm opened in November in the city, they have made 311 loans worth 390 million yuan (US$57 million).
The Shanghai small-credit companies charge an average rate of 15.8 percent for a loan, with the lowest rate at 5.99 percent. The People's Bank of China, the central bank, has set the one-year benchmark lending rate at 5.31 percent while the key rate for a six-month loan is 4.86 percent.
Though they are banned from accepting deposits, small-credit firms can make short-term loans of a maximum of one-year duration to meet the thirst for short-term capital by small businesses. They can charge higher interest rates than banks, thanks to their flexible credit-issuing procedures.
There are more than 300,000 small business firms in Shanghai, and most find it hard to get bank loans.
The city will help small-credit companies to develop their lending system and offer preferential policies to help the industry, the Shanghai Financial Services Office said, without giving more details. Shanghai is expanding the trial scheme on small-credit companies from 10 rural-related districts to the rest of the city.
Shanghai has approved the set-up of 23 small-credit companies, of which 14 have started operations. Since the first such firm opened in November in the city, they have made 311 loans worth 390 million yuan (US$57 million).
The Shanghai small-credit companies charge an average rate of 15.8 percent for a loan, with the lowest rate at 5.99 percent. The People's Bank of China, the central bank, has set the one-year benchmark lending rate at 5.31 percent while the key rate for a six-month loan is 4.86 percent.
Though they are banned from accepting deposits, small-credit firms can make short-term loans of a maximum of one-year duration to meet the thirst for short-term capital by small businesses. They can charge higher interest rates than banks, thanks to their flexible credit-issuing procedures.
There are more than 300,000 small business firms in Shanghai, and most find it hard to get bank loans.
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