China has implemented multiple measures to increase financial support for small and medium-sized enterprises to resume work and production

The executive meeting of the State Council held on the 25th pointed out that it determined to increase financial support measures for small, medium and micro enterprises to resume work and production in accordance with the principles of marketization and the rule of law, and determined to encourage financial institutions to give temporary deferred repayment of principal and interest arrangements for loans to small, medium and micro enterprises, and new preferential interest rate loans.

"Currently, enterprises are facing problems such as debt repayment, capital turnover and expansion of financing, especially small and medium-sized enterprises." Dong Ximiao, a special researcher at the National Finance and Development Laboratory, said that it is very timely and necessary to increase financial support for small and medium-sized enterprises to resume work and production, which will help small and medium-sized enterprises to better cope with the adverse effects of the epidemic and ensure a safe and orderly resumption of work and production.

The meeting proposed that financial institutions be encouraged to grant temporary deferred repayment arrangements for the principal of loans to small and medium-sized enterprises, including individual industrial and commercial households, that meet the conditions and encounter temporary liquidity difficulties, based on the application of enterprises, with interest payments deferred until June 30 and free of penalty interest. All kinds of enterprises in Hubei Province can enjoy the above policy.

Wen Bin, chief researcher of China Minsheng Bank, believes that these measures are highly targeted and can alleviate the pressure of repayment and interest payment of small and medium-sized enterprises and prevent the enterprise capital chain from breaking.

The meeting proposed to increase the amount of refinancing and rediscounting by 500 billion yuan, focusing on small and medium-sized banks to increase credit support for small and medium-sized enterprises. At the same time, the interest rate on agricultural and small-scale refinancing was cut by 0.25 percentage points to 2.5 percent. By the end of June, local corporate banks will be allowed to apply for refinancing funds in equal amounts for new loans to small and micro enterprises that are not higher than the quoted interest rate in the loan market plus 50 basis points.

Wenbin said the effects of structural monetary policy tools are gradually emerging. By increasing refinancing and rediscounting, and lowering interest rates on refinancing to support agriculture and small businesses, we can directly increase the low-cost funding sources for small and medium-sized banks and improve their ability to extend credit to small and medium-sized enterprises. "At the same time, we should pay attention to the role of the inclusive financial system, encourage commercial banks to increase credit support for small and micro enterprises, and further reduce the financing costs of enterprises."

The meeting proposed to encourage and guide national commercial banks to increase credit to small and micro enterprises, and strive to make small and micro loan interest rates significantly lower than the previous year. Large state-owned banks in the first half of the inclusive small micro-enterprise loan balance year-on-year growth rate to strive for not less than 30%. The policy bank will increase the special credit line of 350 billion yuan to be issued to private, small and medium-sized enterprises at preferential interest rates.

Dong Ximiao believes that in the key stage of epidemic prevention and control and resumption of work and production, large state-owned commercial banks should give full play to the role of the main force, speed up the small and medium-sized enterprise loans, lead and drive the banking industry to further strengthen services to small and micro enterprises, to provide better financial support for the resumption of work and production, to help do a good job of "six stability.

Information source: China Government website

Editor He Yang of this website/Organizing