A senior Chinese central bank official said on Friday that financing conditions had improved for small and medium-sized enterprises (SMEs) in recent months, reflecting government moves to increase their access to loans.
Yi Gang, vice governor of the People's Bank of China (PBOC), cited a record increase in total loans and a surge in the amount of commercial paper, which is often used or held by SMEs.
"Many small and medium-sized enterprises probably secured more loans from commercial banks, as total loans made in the first 10 months reached a record high of 3.66 trillion yuan," Yi told a press conference in Beijing. The amount he mentioned is equivalent to US$535.9 billion.
Yi pointed out that the PBOC in August raised this year's credit quota by 5 percent for national commercial banks and 10 percent for local commercial banks. The move was aimed at easing the financial difficulties of SMEs.
Central bank statistics showed that commercial paper increased by 60.8 billion yuan in October, the largest rise ever. That gain was 15 percent more than the rise of 52.8 billion yuan recorded in August. The figure for September was not contained in the PBOC reports on its website.
It is often difficult for SMEs to borrow from commercial banks, and many SMEs have struggled since last year amid the credit squeeze that developed as a result of previous PBOC tight money policies.
Experts have long contended that financing difficulty was a critical bottleneck to the growth of the SMEs.
Yi told reporters the financing difficulty of SMEs would be further eased with "moderately active" monetary policies that have been put in place.
More than 95 percent of SMEs are privately owned and many are in the export sector. They generate almost 60 percent of GDP, 50 percent of tax revenues, 68 percent of exports and 75 percent of new jobs every year.
Apart from improving access to loans, the government has taken other measures to support SMEs. For example, it has raised export tax rebates three times so far during the second half.
(Xinhua News Agency November 14, 2008)