Guangzhou will dole out over 1 billion yuan to raise 20 billion yuan through financing channels to support small and medium-sized enterprises (SMEs) over the next five years, an official with the Industry and Information Technology Commission of Guangzhou Municipality said early this month.
SMEs make up a large part of China's economy. By the end of 2015, the majority of the 21.9 million registered enterprises in the country were small and medium-sized businesses, according to government data. They accounted for about 99.6 percent of all industrial firms.
However, SMEs often are deterred from investment as banks are reluctant to proffer loans to them out of risk concerns, said Chen Yongjie, a senior researcher with the All-China Federation of Industry and Commerce.
Easier access to financing is one of 10 policy measures taken by the Guangzhou government to promote the development of SMEs in the city.
Since traditional financial subsidiaries from the government cannot meet SMEs’ growing demand for investment, the Guangzhou government will establish a 1-billion-yuan financial fund to set up two companies, which have signed cooperative agreements with five banks, offering 20 billion yuan of financial support. Participating banks are the China Construction Bank, the Bank of Guangzhou, Huaxia Bank, the Bank of Communications and the Agricultural Bank of China.
(By Annie Lee, Louis Berney)