China’s banking and insurance regulator said yesterday that it will improve credit support and reduce real financing costs for micro and small businesses this year to better support economic recovery.
Through a statement, the China Banking and Insurance Regulatory Commission (CBIRC) said that financial institutions should grant reasonable credit to SMEs but, at the same time, avoid the risk of “over loans”.
The CBIRC reiterated that its objective is to improve the quality of financial services for SMEs and micro-enterprises, in addition to promoting market vitality and boosting confidence.
Financial institutions must set reasonable prices for loans based on the prime rate and the characteristics of SMEs and microenterprises.
The CBIRC assured that it will optimize the credit structure for SMEs and reasonably cover the financing needs of small companies with a credit line of more than 10 million yuan (1.44 million US dollars).
The regulator added that financial institutions should not renew loans for non-commercial and production purposes.
