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August 29, 2009

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Home » Business » Finance

Sinosure ties with banks to offer credit

CHINA Export and Credit Insurance Co yesterday tied up with banks in Shanghai to help small and medium firms get financing as the city encourages credit for small business.

The policy insurer, known as Sinosure, signed agreements with banks, including the Bank of China, the Bank of Shanghai, Citibank, HSBC, and Standard Chartered Bank. Six companies yesterday were granted a combined credit of US$22.9 million in policy financing deals with the support of the Shanghai authorities.

"The policy financing is a financial innovation to help small business get financing channels," Fang Xinghai, director of the Shanghai Financial Services Office, said yesterday. "It's a novel idea and not yet fully tapped."

On Thursday, four Shanghai government bodies, including the Financial Services Office and the Shanghai bureaus of the banking and insurance regulators, jointly issued a guideline to boost credit policy financing in the city to expand financing channels for small and medium enterprises.

Banks and small-sum credit firms can team up with insurers to offer the financing.

The policy financing works this way: Export-oriented firms buy export credit policy from the insurer to cover the risks of default by buyers. The exporters can get loans from banks by transferring the rights on the policy to banks. If a default happens, the insurer pay the money to the banks.

Beijing-based Sinosure has helped the small companies get credit of 1.8 billion yuan so far this year in Shanghai.

The figure is expected to top 10 billion yuan for this year, said Nie Qingshan, deputy general manager of Sinosure.


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