Financial institutions make all-out efforts to give credit where it's due

The outbreak of novel coronavirus pneumonia in China has seen various types of lenders making an all-out effort to meet the financing needs of a range of businesses devoted to disease prevention and control.

Banks and rural credit cooperatives stepped up credit issuance with the aim of supporting these companies to keep producing medical products and protective supplies, said Pan Guangwei, executive vice-president of the China Banking Association.

As of noon of Feb 18, the banking sector had provided more than 704 billion yuan ($101 billion) in loans to support the fight against the epidemic, according to data released by the association.

Industrial and Commercial Bank of China Ltd, the largest bank in China by total assets, extended loans worth 1.7 billion yuan from Jan 24 to Feb 11 to companies that directly participate in the production of epidemic prevention supplies and daily necessities.

Considering that the Ministry of Finance will offer a 50-percent discount, the one-year interest rate on those loans will work out to less than 1.6 percent.

Postal Savings Bank of China Co Ltd also offered loans to white-listed small businesses that are engaged in controlling disease and ensuring people's livelihoods. Its loans carry one-year lending rates ranging from 2.2 percent to 3.15 percent. It took a further step by cutting lending rates for small business owners in Hubei province, the center of the outbreak, by 50 basis points from the current level.

China CITIC Bank Corp Ltd allocated special-purpose credit funds totaling 10 billion yuan to Hubei province, encouraging its branches located in key areas of the coronavirus outbreak to increase loan issuance.

The bank also strengthened online financing service by extending almost 30 million yuan in loans online to nearly 200 small businesses transporting disease control supplies.

"Apart from increasing loans and cutting lending rates, financial institutions either waived or lowered several types of fees for medical institutions, pharmaceutical companies, medical equipment suppliers, construction companies and security agencies that joined the fight against novel coronavirus," said Pan of the China Banking Association.

"Banks also improved the efficiency of financial services, including loan approval and remittance services, for relevant companies by simplifying procedures and assigning people to handle the allocation of funds in a timely manner," he said.

The China Banking and Insurance Regulatory Commission has instructed banks and insurers to take multiple measures, such as cutting lending rates for small businesses by 0.5 percentage point from last year and waiving extra interest charges on overdue loans, to help micro－and small-sized enterprises get through temporary difficulties caused by the novel coronavirus pneumonia.

Liang Tao, vice-chairman of the commission, said on Feb 15: "Banking and insurance regulators do not allow banks to withdraw or reduce loans issued to the industries that are severely affected by the outbreak, such as retail, wholesale, catering, logistics, culture and tourism, as well as the companies that have great potential but suffer temporary difficulties."