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New Loans for SMEs Up 23% in Q1

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The total new loans for China's small and medium-sized enterprises (SMEs) grows faster than that for big companies, as the government measures to allow easier access to financing have begun to take effect, according to a Chinese central bank official.

The SMEs in the country were granted new loans totaling 1.12 trillion yuan (US$164.7 billion) in the first quarter of the year, up 22.9 percent year on year, Du Jinfu, deputy governor of the People's Bank of China, the central bank, told the China-UK SME Finance Forum that opened in Beijing Monday.

Du's remarks were carried in a statement posted at the website of the central bank Wednesday.

According to Du, the growth rate of new loans granted to SMEs was 5.5 percentage points higher than the growth in new loans for large enterprises.

From January to March, small enterprises secured 445.5 billion yuan of new loans, up 23.9 percent year on year. This growth was 6.5 percentage points higher than the growth of new loans for large enterprises, Du said.

Financing has long been a bottleneck in the development of SMEs in China as banks prefer to lend money to big enterprises, particularly state-owned enterprises with good reputation.

Du vowed the central bank would borrow ideas internationally, intensify research and work out financial policies to support development of SMEs so as to advance a sustained and healthy growth of the national economy.

China has taken measures to help SMEs get finance, such as adopting differentiated reserve requirement ratio to the Rural Credit Cooperative, the major lender to SMEs, and encouraging innovation in SMEs' bond issuance.

Earlier this month, PBOC also pledged to improve financial services for SMEs by offering them better access to finance while encouraging banks and financial institutions to lend more to SMEs this year than last year.

(Xinhua News Agency July 22, 2010)