China PBOC Urges Increased Lending to Small Businesses

China’s central bank on Monday urged the nation’s banks to further step up lending to small businesses, while lowering their loan rates.

The People’s Bank of China in a notice asked its branches to better use relending and re-discounting tools to guide financial institutions to increase loans to small and medium enterprises. It also encouraged small banks to issue special financial bonds, which will be used to extend financing to small businesses.

The central bank asked banks to increase tolerance of bad debt accumulated from lending to small businesses, which are normally seen as risky borrowers in the state-dominated banking system.

It also encouraged lenders to use big data in speeding up loan issuance to small enterprises.

Beijing has ordered state banks to sharply increase lending to small private businesses after the world’s second largest economy was derailed by the coronavirus outbreaks. Small enterprises bore the…

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