Four major State-owned banks showed unprecedented credit support to small and medium-sized enterprises (SMEs), according to a recent report.

Statistics show that by the end of May, the amount of outstanding loans issued by four major state-owned banks -- Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB) -- to SMEs exceeded 6 trillion yuan (US$878 billion).

Yang Kaisheng, president of ICBC, revealed at an international forum held by CCTV that in the first five months of this year, 61 percent of ICBC's credit extension went to SMEs, an increase of 325.4 billion yuan. As of the end of May, the amount of outstanding loans amounted to 2.22 trillion yuan and SME loans accounted for 49 percent of the total.

ABC increased SME loans by over 240 billion yuan in the first five months, accounting for nearly 50 percent of the total increase of loans, according to ABC President Zhang Yun.

Li Lihui, president of BOC, said BOC's SME loans increased by 44 percent in the January-May period, reaching 1.1 trillion yuan by the end of May, with over 30,000 SME clients.

CCB vice president Zhu Xiaohuang said CCB's SME loans reached 1.2 trillion yuan, accounting for 42 percent of total loans.

Wang Zhaoxing, vice president of China Banking Regulatory Commission (CBRC) also said that SME loans have kept a steady growth, with a growing rate much higher than that of regular loans going to large enterprises.

There have been concerns, however, whether credit support from the country's leading banks will continue.

Xu Xiaonian, a professor from the China Europe International Business School, believes small and medium-sized banks should be the main force granting SME loans, because large banks don't have cost advantages in serving small companies.

But Yang Jiacai, an official from the CBRC in charge of SME financial services, disagrees, saying both large and small banks can provide good financial services to SMEs.

(chinadaily.com.cn June 8, 2009)