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Shanghai to rev up financing to smaller firms, vice mayor says

SHANGHAI will keep improving fundraising services for small and micro businesses and supporting development of Internet finance as part of an effort to build an inclusive financial system, a senior city official said today.

“The government will strengthen the city’s credit guarantee system to reduce funding obstacles of  small and micro firms and build an information sharing system to reduce information asymmetry between financial institutions and enterprises,” Tu Guangshao, the city’s executive deputy mayor, said during the Mayor Hotline program of the Shanghai Media Group, answering questions from city residents.

Shanghai has introduced a slew of measures to encourage lending to small businesses. A pilot program has been launched to compensate banks for bad loans produced by small and micro firms. The government also offers rewards to banks that are active in providing loans to small companies.

“Small and micro businesses play an irreplaceable role in creating jobs and boosting growth and are important in Shanghai’s bid to push forward an innovation-driven economy,” Tu said.

By the end of 2013, the number of small and micro enterprises totaled 370,000 in Shanghai, accounting for 97.1 percent of the total incorporated enterprises and contributing to 54 percent of the employment.

An inclusive financial system emphasizes the provision of financial services to individuals and small and micro enterprises that were previously excluded from financial markets.

Tu said Internet finance should be a significant part of an inclusive financial system as the use of Internet will greatly improve information transparency and thus bring down funding costs.

The government will soon unveil measures to boost technology, lower threshold and increase policy support for the development of Internet finance in the city, Tu said.


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