Home / Business / News Tools: Save | Print | E-mail | Most Read | Comment
Finding capital for SMEs
Adjust font size:  ZoomIn ZoomOut

The central government has introduced a series of measures to provide the much-needed financing to small and medium-sized enterprises (SMEs) facing unprecedented problems arising from surging energy and material costs and weakening overseas demand.

Compared with the well-capitalized large State-owned enterprises, SMEs are much more vulnerable to both domestic and global economic uncertainties, economists and industry experts said.

Latest statistics from the National Development and Reform Commission show that in the first six months of 2008, about 10 percent of SMEs reported an average 15 percentage point drop in their industrial output growth from a year earlier to 30 percent. This indicates a significant shrinkage in their profit margins.

SMEs have also been hit by the credit crunch resulting from the government's tightening monetary policy to fight inflation.

Dearth of bank loans has exacerbated the capital shortage of many SMEs, straining their production capability and ability to make longer-term plans. Some are reported to have suspended production, having run out of working capital.

At a time when credit is tight, banks have understandably focused lending operations on traditional customers - large State-owned enterprises, which are much more creditworthy than SMEs.

According to figures released by the China Banking Regulatory Commission, total loans obtained by SMEs in the first quarter of 2008 dropped by 30 billion yuan year-on-year.

Aggregate lending by commercial banks in the first quarter of 2008 amounted to 2.2 trillion yuan, of which only 300 billion yuan was extended to SMEs, accounting for 15 percent of the total.

To address the problem of insufficient funding for small businesses, the central government has taken several steps to provide the capital-thirsty SMEs with a wider access to loans.

In early August, the National Development and Reform Commission said it was considering establishing a bank specializing in lending to SMEs to broaden their sources of finance.

A week later, the People's Bank of China increased the annual loan quota by 5 percent for national commercial banks and by 10 percent for local commercial banks, taking into consideration that SMEs make up a larger proportion of their clients.

The incremental lending as a result of the increase in loan quota is expected to go to SMEs, which have a stronger demand for loans than the large State-owned enterprises.

In addition to the efforts made by the central government, many local private-sector trade agencies have organized financing opportunities for SMEs.

In Wenzhou, in Zhejiang province, home to the biggest number of SMEs in China, 16 new microcredit lenders are in the process of being established, according to Zhou Dewen, president of Wenzhou council for the development promotion of small and medium-sized enterprises.

"Private capital is playing an increasingly important role in funding the growth of SMEs," Zhou told China Daily. "More private capital is being pumped into SMEs in the form of microcredit, and ease their capital shortage."

According to Zhou, 20 percent of all SMEs in the city have suspended production this year because of capital shortage. Zhou also said more than 270 loan guarantee agencies have been established in Wenzhou to help SMEs obtain bank loans. There were only two such loan guarantee agencies in 2000.

An industrial upgrade has become necessary in Wenzhou as the city has relied too heavily on traditional labor-intensive manufacturing for long and is paying for it now.

Zhou said the local government in Wenzhou is trying all means to create a balanced economy by increasing the proportion of high value-added industries, including shipping, electromechanical and biopharmaceutical sectors.

(China Daily August 27, 2008)

Tools: Save | Print | E-mail | Most Read
Comment
Pet Name
Anonymous
China Archives
Related >>
- Loan quota raised to aid SMEs
- Top economic body mulls bank for SMEs
- SMEs seek non-bank finances
- SMEs get a boost with more aid
- Bank sees SMEs as growth engines
Most Viewed >>
- Bank of China: Terror allegations 'unfounded'
- It's correction time: China's housing market to slow down
- Chinese consumer mood rallies
- Hu: Peaceful development is our motto
- Small-sum loan business enters launch countdown
- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?
主站蜘蛛池模板: 妇乱子伦精品小说588| 日韩精品一区二区三区中文精品 | 99久久国产综合精品麻豆| 精品国产污污免费网站入口| 国产精品视频一| chinese男子同性视频twink| 成人免费视频在线播放| 久久久久成人精品无码中文字幕| 毛片女女女女女女女女女| 国产亚洲成AV人片在线观看| 国产亚洲综合色就色| 国产精品对白刺激久久久| 99久久精品国产一区二区三区| 娇BBB搡BBBB揉BBBB| 丁香九月月小说图片区| 最新国产精品亚洲| 亚洲国产精品嫩草影院久久| 波多野结衣中文字幕电影| 国产一区二区三区美女| 香蕉一区二区三区观| 国产成人女人视频在线观看| 欧美激情视频网| 国产精品jizz在线观看直播| 3d玉蒲团之极乐宝鉴| 成人免费一区二区三区| 丰满肥臀风间由美系列| 日本在线视频www色| 久久天堂AV综合色无码专区| 欧美精品九九99久久在免费线| 国产91精品新入口| chinese麻豆自制国产| 国产精品青草久久久久福利99| 99久久久国产精品免费蜜臀| 在线观看亚洲免费视频| assbbwbbwbbwbbwbw精品| 天海翼视频在线| 中文字幕电影资源网站大全| 欧洲一区二区三区在线观看| 亚洲国产一成人久久精品| 欧美性猛交xxxx黑人| 亚洲国产成人精品久久|