As a price war intensifies among banks competing to offer loans to small businesses, the central bank said that it will encourage large banks to provide more support for smaller companies that have yet to borrow money from financial institutions, reports Caixin Global.
The country’s five biggest state-owned banks (ICBC, Agricultural Bank, Construction Bank, Bank of China and Bank of Communications) expanded their lending to small businesses – defined as companies with total credit lines under RMB10 million ($1.5 million) – by at least 30% this year. In the first five months this year, the average interest rate of the loans the banks issued to small businesses was 4.79%, down 0.65 percentage points from last year’s average.
Last week, Guangdong announcedthat it will ensure at least RMB45 billion in low-interest loans are made available via the provincial brand of Bank of China to help fund the growth of small and micro enterprises (SMEs). Readmore.