A number of financial institutions recently estimated that China's new lending in January will likely reach somewhere between 980 billion yuan ($157.35 billion) and 1 trillion yuan, up greatly from the 454 billion yuan in new loans extended in December.

Some experts have pinned recent signs of recovery in the domestic economy on the rising demand for credit and speculate that the real economy, particularly small- and medium-sized enterprises (SMEs), will benefit from the expansion in loans.

Actually, such conclusions are a long way from reality. Most SMEs can hardly keep up with their current debts these days since many banks are now pressuring them to repay their loans ahead of schedule.

Moreover, inflated lending rates, high deposit requirements and a multitude of commission fees have all done their part to add to borrowing costs, making it harder for most SMEs to afford credit.

The author is Tan Haojun, an economic commentator.