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Big Chinese banks asked to launch 'inclusive finance' units: Xinhua
[SHANGHAI] China's State Council has asked the country's big commercial banks to set up "inclusive finance" departments by the end of the year to support small businesses, entrepreneurs and farmers, and help alleviate poverty, state news agency Xinhua reported on Thursday.
Growth in lending to small and micro businesses should at least match overall loan growth while the number of borrowers in that category should not shrink on a year-on-year basis, the Xinhua report said, citing a statement following an executive meeting of the State Council, or cabinet.
Banks should allow "a reasonably higher non-performing loan ratio" for lending to small and micro enterprises, agriculture and poverty alleviation projects, it said.
Bank lending in China has long been skewed in favour of state-owned companies or large and well-established firms, leaving small and medium-sized firms, and those in rural areas, struggling to nail down funding.
Large banks should become "the backbone" of inclusive finance, Xinhua quoted the cabinet statement as saying.
To support inclusive finance, the government will offer monetary and credit policy incentives, it said without elaborating.
"By coordinating different measures, inclusive and convenient financial services will promote job creation, economic upgrading and improvement of people's lives," Xinhua quoted the statement as saying.