Stabilize loans for enterprises
On January 31, the People's Bank of China, the Ministry of Finance, the Banking Insurance Regulatory Commission, the Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly proposed that the hard-hit industries, such as wholesale and retail, accommodation and catering, logistics and transportation, cultural tourism and etc., or other struggling enterprises with potentials for development, especially small and micro enterprises, their loans shall not be blindly drawn down, broken or oppressed. For those who have been severely affected by the epidemic and find it difficult to repay their loans in time, it is allowed to apply for deferred payment or renewed loans. Relevant enterprises should be supported to mitigate the impact of the epidemic by means of appropriate reduction of loan interest rates, increase of credit loans, and long- and medium-term loans.
The Banking Insurance Regulatory Commission, the People's Bank of China, the Development and Reform Commission, the Ministry of Industry and Information Technology and the Ministry of Finance issued a joint notice on March 1 prescribed that epidemic-hit SMEs and micro enterprises, including small business owners and individual household businesses, can apply with bank for deferred repayment if they have difficulties in repaying capital or interest during the period of epidemic outbreak. And banks can give enterprises a certain period of deferred payment according to their impact level and business conditions, which can be extended up to June 30, 2020. Default rate will be exempted for overdue repayments in the period.
Noteworthy measures:
Binzhou, Shandong Province: Financial Stability Fund of 30 million yuan has been set up for SMEs to respond to the epidemic. The Fund provides bridge funds for enterprises with difficulties in short-term capital turnover to repay loans and renew loans on time.
Yuhang District, Hangzhou City, Zhejiang Province: Special Funds for refinancing was expanded to 300 million yuan with more flexible scope of support, simplifying approval procedures, and rapid refinancing services.
Guangzhou, Guangdong Province: 500 million yuan granted the financial institutions and various enterprises which support the operation and development of SMEs.
The Macao Special Administrative Region: A special SME Assistance Program has been launched for SMEs established within two years, which provides interest-free assistance loans of up to 600,000 patacas, with a maximum repayment period of 8 years.
Streamline processes and reduce costs
Financial institutions are required to provide fast channel, set up online business processing, simplify credit application materials, shorten the time for credit approval, and provide high-quality financial services to enterprises efficiently. The Ministry of Finance proposed on February 1 that government guarantee and re-guarantee institutions at all levels should cancel counter-guarantee requirements and reduce guarantee and re-guarantee fees. For financing guarantee and re-guarantee institutions in areas affected by the epidemic, the State Financing Guarantee Fund halved the re-guarantee fee.
Noteworthy measures:
Ningbo, Zhejiang Province: A large online financing docking has been launched. Enterprises only need to log in to Ningbo Inclusive Financing Credit and Information Service Platform and enter financing requirements in the "Financing and Docking" section. The city's 64 financial institutions will be ready to lend, and the eligible enterprises only need to waiting 48 hours to get their loans.
Beijing: A fast channel was set up to facilitate financing for those which are affected by the epidemic or take part in the prevention and control of the novel coronavirus. The whole process is paperless and it only requires enterprises to provide electronic and video materials which have been reduced to 2/3 of the previous ones. In addition, guarantee approval and bank lending are seamlessly connected. The procedure that used to take half a month or even more to complete, now only takes about 3 days.
Innovate financial products and services
The advantages of Internet are fully used for its convenience and speed, and targeted financing products for SMEs are developed as soon as possible during the epidemic to meet their urgent demands. SME financing service platforms should play an active part in docking governments, banks and enterprise in a bid to promote accurate matching of supply and demand.
Noteworthy measures:
China Construction Bank specially launched the "Yunyi Loan" exclusive credit service for the entire industry chain of epidemic prevention and control, inclusive customers groups including hard-hit SMEs and their owners, and self-employed business owners. The eligible enterprises can apply for it without leaving home through APP and mobile banking system. Only one day after the launch of "Yunyi Loan", the credit amount exceeded 1.2 billion yuan, benefiting more than 1,100 new and old customers, and the investment amount reached 368 million yuan.
Industrial and Commercial Bank of China has launched exclusive online credit loans such as "anti-epidemic loan", "medical insurance loan" and "employment loan" for small and micro enterprises which have resumed work or take part in epidemic prevention and control. As of February 25, the credit loans balance issued online by ICBC has exceeded 35 billion yuan, benefiting more than 70,000 small and micro enterprises.
Provide differentiated financial services
The Ministry of Finance proposed on February 1st that more financial support and better capital management will be given to the enterprises on the key list of the prevention and control of epidemic. For those on the list, the central bank will provide re-lending facilities so that they can borrow money from banks at preferential lending rates, and the central government will offer subsidies equivalent to 50% of their interest expenses for no more than one year.
Preferential financial services should be targeted to the regions, enterprises and individuals seriously affected by the epidemic. Special supports should be given to the relevant enterprises by means of properly extending the loan repayment period, lowering the loan interest rate, increasing credit loans and medium and long-term loans, etc. to help them mitigate the impact of epidemic.
Noteworthy measures:
Shanghai: The enterprises in the key list of materials production and transportation for prevention and control of epidemic and daily necessities include SMEs, will be provided loans with preferential interest rate, and the financial department of government will give another half of the discount interests to ensure that the loan interest rates are below 1.6%.
Liaoning Province: The enterprises in the key list of epidemic prevention and control will be provided with loans with the discounted interest rate as 75% of the re-loan interest rate of the PBC, to ensure that the loan interest rates are below 1.6%.