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PBOC governor: Challenges remain despite our work

CCTV.com

04-15-2016 13:06 BJT

China has made a point of trying to facilitate financing for small- and medium-sized enterprises. The governor of the People’s Bank of China, Zhou Xiaochuan, spoke about how this can be achieved on the sidelines of an OECD meeting in Washington.

Small- and-medium-sized enterprises make up more than 97 percent of all the companies in China. They employ four-fifths of the workforce and contribute to about 60 percent of the country’s GDP.

Many have problems sourcing credit to expand, but a series of measures have been rolled out to help them get easier access to finance. According to the OECD, Chinese firms received twice as many loans in 2013 as four years earlier.

“Despite what we have done, we still face many challenges in SME (financing),” Zhou said.

The governor said China’s SMEs have become one of the strongholds of the country’s economic growth. But they still fall short when it comes to credit scoring, and they need to pass this to borrow. Banks and other financial institutions are slow to provide loans to these SMEs because of their lack of collateral.

To solve this problem, the governor has vowed to promote equity financing, and help incubate crowd-funding. He is also encouraging people to consume more, rather than deposit their money in banks.

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