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Small loan businesses find businesses are thriving
By Gu Jialan and Fei Lai |
February 23, 2009, Monday
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Print Edition
Print Edition
AFTER two months operation, West Shanghai Small-loan Co Ltd and Yinfeng Small-loan Co Ltd, the first two small-loan companies in the district, had granted 37 loans totaling more than 60 million yuan (US$8.77 million) by the end of last month.
The largest of these was for 5 million yuan and the smallest for 100,000 yuan, according to the district's economic committee.
Yinfeng has delivered 19 various loans worth 35.09 million yuan. Among them, 10 small and medium-sized enterprises received 24.5 million yuan, accounting for 70 percent of the total.
An architectural enterprise received a loan of 5 million yuan. Two loans totaling 1.8 million yuan went to small and medium-sized trade enterprises. Six loans totaling 3.79 million yuan were offered to individuals.
Like Yinfeng, most loans granted by West Shanghai were to small and medium-sized enterprises.
A staff member from West Shanghai surnamed Bo said companies of good quality usually received excellent service from financial institutions.
"However those companies seeking help from small-loan companies are often immature businesses in urgent need of money," he continued. "Therefore, when we choose clients, enterprises of real entity become our first choice."
Shanghai Baotong Metal Material Co Ltd was one of the first enterprises to receive a loan. Its manager surnamed Xu said his company was small and he had to spend a lot of time applying for loans and was often rejected.
"Last year, the company faced a severe cash flow shortage. Learning of the establishment of small-loan companies in Jiading District, I went to Yinfeng for consultation," Xu said. "In the end, we successfully received a loan of 500,000 yuan and solved the emergency."
Generally, it takes a week for small-loan enterprises to finish the procedure from loan applications to granting.
If an enterprise applies with all the documentation needed this can be reduced to three days. In contrast, it usually takes more than a month to receive a loan from a commercial bank.
Yinfeng's manager, surnamed Zhu, suggested that in the development period for small-loan enterprises, local government and financial institutions are expected to offer support in employee training and risk evaluation system.
"The client selection system of financial institutions can be shared with the small-loan enterprises, so as to support the economic development in rural areas as well as for the small and medium enterprises," said Zhu.
The largest of these was for 5 million yuan and the smallest for 100,000 yuan, according to the district's economic committee.
Yinfeng has delivered 19 various loans worth 35.09 million yuan. Among them, 10 small and medium-sized enterprises received 24.5 million yuan, accounting for 70 percent of the total.
An architectural enterprise received a loan of 5 million yuan. Two loans totaling 1.8 million yuan went to small and medium-sized trade enterprises. Six loans totaling 3.79 million yuan were offered to individuals.
Like Yinfeng, most loans granted by West Shanghai were to small and medium-sized enterprises.
A staff member from West Shanghai surnamed Bo said companies of good quality usually received excellent service from financial institutions.
"However those companies seeking help from small-loan companies are often immature businesses in urgent need of money," he continued. "Therefore, when we choose clients, enterprises of real entity become our first choice."
Shanghai Baotong Metal Material Co Ltd was one of the first enterprises to receive a loan. Its manager surnamed Xu said his company was small and he had to spend a lot of time applying for loans and was often rejected.
"Last year, the company faced a severe cash flow shortage. Learning of the establishment of small-loan companies in Jiading District, I went to Yinfeng for consultation," Xu said. "In the end, we successfully received a loan of 500,000 yuan and solved the emergency."
Generally, it takes a week for small-loan enterprises to finish the procedure from loan applications to granting.
If an enterprise applies with all the documentation needed this can be reduced to three days. In contrast, it usually takes more than a month to receive a loan from a commercial bank.
Yinfeng's manager, surnamed Zhu, suggested that in the development period for small-loan enterprises, local government and financial institutions are expected to offer support in employee training and risk evaluation system.
"The client selection system of financial institutions can be shared with the small-loan enterprises, so as to support the economic development in rural areas as well as for the small and medium enterprises," said Zhu.
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