China’s central bank has introduced a series of measures aimed at helping small and medium-sized enterprises (SMEs) weather external uncertainties and stabilize their operations, according to an official with the research institute of the central bank.
“The moderately loose monetary policy adopted by the People’s Bank of China (PBOC) helps expand funding available to the real economy, lower financing costs for businesses, especially the SMEs, and enhance their operational stability,” said Ding Zhijie, head of the Research Institute at the PBOC, at the latest episode of China Economic Roundtable, an all-media talk show hosted by Xinhua News Agency.
Ding said the PBOC has taken steps to bolster the smaller businesses by providing stronger credit support and easing their interest burdens.
By the end of April, the outstanding inclusive loans issued to micro and small enterprises reached 34.3 trillion yuan (about 4.77 trillion U.S. dollars), up 11.9 percent year on year, outpacing the growth of overall lending.
The cost of financing for businesses has also declined. In April, the weighted average interest rate on newly issued corporate loans stood at 3.2 percent, down 50 basis points from a year earlier.
In a further move, the PBOC has decided to add 300 billion yuan to its relending quota, aimed at supporting the agricultural sector and small businesses.
Ding also emphasized the role of the entrepreneurship guarantee loan, a policy tool introduced in 2016 to spur job creation and entrepreneurship. He said the central bank would continue urging banks at all levels to implement the policy more effectively to expand financial assistance in stabilizing employment.
