SOURCE / ECONOMY
China enhances support for micro, small enterprises, encourages financial institutions to defer debt, interest payments
Published: Nov 14, 2022 11:04 PM
PBC Photo:Xinhua

PBC Photo:Xinhua


Six Chinese departments including the People’s Bank of China (PBC), the country’s central bank, have released an announcement that they are encouraging financial institutions in the banking sector to defer debt and interest payments for loans due in the fourth quarter for small and micro enterprises, the PBC said on Monday. 

According to the PBC, the announcement is aimed at further increasing support for small and micro businesses and other market players, in a bid to stabilize the national economy.

For small and micro enterprises that are in difficulties due to the impact of the COVID-19 epidemic, the principal and interest repayment date can be extended up to June 30, 2023, and the deferred loans are free of penalties, the announcement read.

The financial institutions are being required to adjust their credit management systems and improve the related exemption regulations related to loan deferment, and not to adjust the risk classification separately due to the epidemic factor or to allow credit records to be affected.

According to the announcement, the financial institutions should also innovate loan extension products and services and provide enterprises with differentiated loan extension methods, online renewal products and online processing channels.

In order to fully mobilize the enthusiasm of banking and financial institutions, the PBC will make use of a variety of monetary tools to maintain reasonable liquidity in the banking system; financial regulators are also required to implement differentiated policies including tolerance for non-performing loans of small and micro enterprises.

In the assessment of the operating performance in 2022 of State-controlled financial institutions, financial departments at all levels should take full account of the impact of the deferred debt service policy to give reasonable evaluation, the announcement read.

At the same time, governmental financing guarantee institutions are encouraged to extend the guarantee period for enterprises with loan extension needs and to continue to provide credit enhancement support.