Fintech, credit information sharing to boost small businesses
Emphasis on inclusive finance in lending should create a category of key clients
Banks have stepped up efforts to provide more effective support to small businesses by using fintech and better sharing business credit information between lenders and government agencies, as China strives to promote development quality of inclusive finance.
At a recent meeting of the Central Committee for Deepening Comprehensive Reform, President Xi Jinping said China will promote high-quality development of inclusive finance and build a sound, highly adaptable, competitive and inclusive financial system. , to better meet diversified financial needs. people and the real economy.
The country will strengthen supervision and evaluation to promote a marked increase in inclusive lending to micro and small enterprises and a further increase in the proportion of unsecured and first-time lending, the government work report said. presented by Premier Li Keqiang to the fifth session of the 13th National People’s Congress on March 5.
Last year, China CITIC Bank Corp Ltd, a national joint-stock commercial lender, offered loans totaling 6.89 million yuan ($1.08 million) to GSY Biotechnology, a company based in Jinan, province. of Shandong, specializing in the development and export of products for veterinary use. .
After online and offline due diligence, GSY Biotechnology went through the online loan application process, and China CITIC Bank online approved one-year unsecured loans to the company at a rate of interest of 4.2%.
The bank has launched a collateral-free online loan product for technologically advanced small businesses based on analyzes of their credit reports and other types of data, including those provided by the administration for market regulation at different levels of government and branches of the judiciary.
The product demonstrates the bank’s attempts to engage in digital inclusive finance, which involves deploying digital means to reach currently financially excluded and underserved businesses and populations with a range of financial services tailored to their needs.
“We will promote business credit information sharing and accelerate information sharing between financial institutions and tax offices, customs, electric utilities and other agencies,” the report said. government activity.
He added that China will channel more funds to key areas and weak links, and expand the coverage of inclusive finance.
Xu Jianfeng, deputy general manager of the inclusive finance department of the Zhejiang branch of the Bank of China, said the BOC has sought advice from local government science and technology offices, industrial park administrative committees and institutional investors. who have a fairly deep understanding of tech companies. , especially tech startups with negligible sales value.
“After considering opinions from all parties, we assessed the overall capabilities of a business team, the technology value and prospects of a technology company, and the market potential of its products,” Xu said.
The bank has also worked with internal and external investment funds in terms of introducing clients and venture lending, a type of debt financing designed for start-up and high-growth businesses with venture capital backing. .
Nearly 85% of bankers surveyed cited inclusive finance as a development priority for China’s banking sector during the 14th Five-Year Plan period (2021-25), according to a survey jointly released by the China Banking Association and PwC on March 2.
The survey found that 74.5% of bankers considered small and micro business lending to be the top priority for business finance in 2021. Almost 80% of bankers said small businesses and the self-employed will be a category of key clients for the banking sector in the next phase.
At the end of 2021, the loan balance for small businesses with a total credit line of up to 10 million yuan per borrower was 19.1 trillion yuan, up 24.9 percent year on year, according to the report. China Banking and Insurance Regulatory Commission. .