Financing support enhanced for micro, small companies
China has issued a guideline for stepping up financing support for micro and small enterprises, signaling the latest push for promoting a sector that is key to stabilizing employment and reviving the nation's growth momentum.The document, jointly released on Wednesday by the National Financial Regulatory Administration and seven other central departments, details 23 measures, including supporting MSEs to seek equity funding and increasing financial support for tech and innovative MSEs.This marks a crucial step toward tackling financing difficulties for micro and small businesses and supporting their long-term development, analysts said on Thursday.They added that the guideline is part of the country's larger drive to stabilize the overall economy amid mounting external uncertainties and subdued domestic demand, which will significantly boost confidence and stabilize expectations among MSEs.China has pledged to channel more resources toward key sectors such as foreign trade, tech and consumption, according to the document."The introduction of the new measures is problem-oriented, with an emphasis on coordination, cost reduction, efficiency improvement and targeted support," said Li Hongjuan, deputy director of the Private Economy Research Office at the Economic System and Management Institute, which is part of the National Development and Reform Commission."The guideline aims to address key bottlenecks and accelerate the implementation of policies that genuinely benefit these enterprises," Li said."MSEs often need small sums of money urgently, for short durations and at high frequency. But financial institutions typically prefer long-term investments and have cumbersome approval processes. This makes it even harder for small businesses to access credit," she added.To tackle such issues, the guideline calls for a comprehensive assessment of the operating conditions and financing needs of MSEs, with the provision to recommend eligible businesses to banks for swift funding at appropriate interest rates. It also urges full implementation of the loan renewal policy without principal repayment to help solve cash flow problems."In the short term, these measures can ease financing difficulties faced by such enterprises," Li said, adding that in the long term, they could help optimize the allocation of financial resources and resolve structural imbalances in financing.On Thursday, Guo Wuping, a spokesman for the National Financial Regulatory Administration, said at a news conference in Beijing that China will steer the coordination mechanism for supporting small enterprise financing to prioritize the technology sector.Zhu Hexin, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange, said that when it comes to the sci-tech board in the bond market, the focus will be on supporting leading equity investment institutions to issue bonds.
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