CBIRC released a notification on strengthening supervision and guidance to enhance the quality and efficiency of financial services for "small and micro-enterprises" (SMEs). The notification details measures taken and planned to alleviate the financing difficulties of small and micro-enterprises, provides overall situation of financial services for small and micro enterprises, and discusses the next steps to enhance quality and efficiency of financial services for small and micro-enterprises.
CBIRC highlighted that non-performing loan ratio is controlled at a reasonable level. The efficiency of small and micro enterprises in banking services has been continuously improved. Many banks use digital technology extensively by identifying effective financing needs, optimizing risk management, and providing convenient online financing services for small and micro enterprises through the online channels. As part of the next steps, the regulator will adhere to the deepening of the structural reform of the financial supply side, improve financial services coverage, increase structural cost reduction, regulate bank service charges, continuously improve the internal operation mechanism of the bank, guide the bank to refine the credit due diligence, promote the transformation of commercial bank loan methods, urge banks to improve their risk management capabilities, focus on reviewing the first source of repayment, reduce excessive reliance on collateral, gradually increase the proportion of credit loans, and improve the promotion of loan renewing business.
CBIRC also intends to promote the establishment of a sound credit information-sharing mechanism, promote the improvement of the use of tax-related data in online direct connection, and provide financial services for small and micro enterprises. The “silver tax interaction” model is used to make good use of the national credit information-sharing platform and international trade. The regulator will develop a long-term mechanism for supervision and evaluation, study and formulate the evaluation system for financial services supervision of small and micro enterprises, comprehensively evaluate the work of small and micro enterprises in banking services, and form a systematic, institutionalized, and standardized assessment and evaluation mechanism. CBIRC will guide banking financial institutions to serve small and micro enterprises.
Related Link (in Chinese): Notification
Keywords: Asia Pacific, China, Banking, Small and Micro Enterprises, NPLs, Credit Risk, CBIRC
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