On October 14th, the State Council Information Office held a press conference to discuss the recent initiatives aimed at bolstering support for businesses. Cong Lin, Deputy Director of the National Financial Regulatory Administration, emphasized that a series of measures have been introduced specifically focused on assisting enterprises. The main goal of these initiatives is to eliminate the financing bottlenecks faced by small and micro enterprises, improve the business environment, and streamline financing channels, all while striving for enhanced services at lower costs.
Overall, the supply of financial resources has been steadily increasing. By the end of August this year, the balance of RMB loans reached 252.02 trillion yuan, a year-on-year increase of 8.5%. Insurance companies provided various types of financing support amounting to 28.8 trillion yuan through bonds, stocks, and other means. In terms of structure, the support for key sectors continues to intensify, with loans to inclusive small and micro enterprises rising by 16.1%, and loans to private enterprises increasing by 9%. On the pricing side, interest rates have stabilized and even declined slightly; from January to August, the interest rates for newly issued loans to inclusive small and micro enterprises dropped by 0.4 percentage points compared to last year.
Cong highlighted several specific measures being implemented:
The first measure involves optimizing the policy for renewals without repayment to assist business entities struggling with cash flow. This policy now applies not just to small micro enterprises but is also being temporarily expanded to medium-sized enterprises. Loans eligible for renewal will not have their credit classification downgraded solely based on the renewal process. Banks are encouraged to enhance risk management by comprehensively assessing borrowers’ payment capabilities and guarantees to appropriately classify the risk of renewed loans.
The second measure, in collaboration with the National Development and Reform Commission, is the establishment of a financing coordination mechanism that supports small and micro enterprises. This mechanism focuses on building specialized teams at the district and county levels to create a precise connection between banks and enterprises. The aim is to thoroughly understand the actual operating conditions of local businesses, allowing for targeted support that effectively addresses financing challenges. On the banking side, efforts are being made to clear information flow and funding transmission obstacles. It is hoped that businesses operating legally with genuine financing needs and good credit will benefit from this mechanism with direct access to funds—without intermediaries and at suitable financing costs.
The third measure is aimed at further leveraging the protective role of insurance. In sectors like construction and foreign trade, the use of performance bonds and customs guarantee insurance is being promoted to replace traditional cash deposits. In the first half of the year, this measure assisted 520,000 enterprises in unlocking existing capital and alleviating cash flow pressure. Additionally, efforts are being made to have export credit insurance companies adopt a comprehensive financial service approach combining “credit protection and policy financing” to help numerous export businesses reduce their concerns.
The fourth measure is to enhance the due diligence exemption system. A key aspect of improving financial services for small and micro enterprises is to relieve pressure on grassroots credit personnel and foster a positive environment that encourages accountability and responsibility. Therefore, recent revisions to the previous due diligence exemption guidelines have clarified various exemption scenarios. Individuals fulfilling their job responsibilities but with minor missteps can be relieved of liability. Many banks have begun to refine and improve their internal regulations in compliance with supervisory requirements, resulting in an increase in both the number and proportion of individuals granted exemptions.
Furthermore, regulatory efforts are increasingly focused on precision regulation. Under the premise of legal and comprehensive oversight, softer, more accommodating measures such as policy guidance, risk warnings, and remediation prompts will be employed to address general operational risks in the inclusive finance sector, particularly in service to small and micro enterprises. The goal is to integrate supervision with service, making regulation more considerate and enhancing financial institutions’ enthusiasm and initiative in implementing business support policies, thereby fostering a conducive environment for enterprise development.
