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Small-loans company gains approval
By Zhang Fengming |
January 7, 2010, Thursday
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Online Edition
Online Edition
SHANGHAI'S first consumer credit company has gained regulatory approval to launch services, probably within six months, joining banks in Beijing and Chengdu in offering small loans.
China Banking Regulatory Commission has given the go-ahead to BOC Consumer Finance Co in Shanghai, which was established by Bank of China, Bailian Group and Lujiazui Finance Development Co.
Bank of Beijing and Bank of Chengdu have also gained approval to set up similar credit companies in their home cities.
BOC Consumer Finance, in Pudong New Area, has a registered capital of 500 million yuan (US$73.21 million), more than the regulatory minimum of 300 million yuan.
The Beijing-based bank, China's biggest foreign exchange bank, contributed 255 million yuan by holding a 51 percent stake in the new company. Bailian, China's largest retail conglomerate, invested 150 million yuan with a 30 percent stake. Lujiazui, an arm of Pudong New Area government, gained a 19 percent stake with 95 million yuan.
The Pudong government today declined to give more details.
"Consumer credit is a significant step to boost domestic demand as China tries to improve its economic structure," said Lu Zhengwei, Industrial Bank's senior economist. "The shift is more urgent since the global credit crunch."
Lu Hongjun, principal of the Shanghai Institute of International Finance, said the approvals indicate China's dedication to take new steps against the financial crisis.
Consumer credit companies can offer quick, short-maturity, small-sum loans to consumers to facilitate purchases of home appliances or travel.
China Banking Regulatory Commission has given the go-ahead to BOC Consumer Finance Co in Shanghai, which was established by Bank of China, Bailian Group and Lujiazui Finance Development Co.
Bank of Beijing and Bank of Chengdu have also gained approval to set up similar credit companies in their home cities.
BOC Consumer Finance, in Pudong New Area, has a registered capital of 500 million yuan (US$73.21 million), more than the regulatory minimum of 300 million yuan.
The Beijing-based bank, China's biggest foreign exchange bank, contributed 255 million yuan by holding a 51 percent stake in the new company. Bailian, China's largest retail conglomerate, invested 150 million yuan with a 30 percent stake. Lujiazui, an arm of Pudong New Area government, gained a 19 percent stake with 95 million yuan.
The Pudong government today declined to give more details.
"Consumer credit is a significant step to boost domestic demand as China tries to improve its economic structure," said Lu Zhengwei, Industrial Bank's senior economist. "The shift is more urgent since the global credit crunch."
Lu Hongjun, principal of the Shanghai Institute of International Finance, said the approvals indicate China's dedication to take new steps against the financial crisis.
Consumer credit companies can offer quick, short-maturity, small-sum loans to consumers to facilitate purchases of home appliances or travel.
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