Program to boost credit support to small firms to continue

China will continue to use its special re-lending program to provide low-cost funds to small- and medium-sized banks, so that they will give stronger credit support to small businesses, said a central bank official on Thursday.

The country will also step up support for small- and medium-sized banks in terms of capital replenishment to improve their lending capacity, said Liu Guoqiang, deputy governor of the People's Bank of China, at a news conference held by the State Council Information Office.

The central bank cut the interest rate of re-lending funds that aim to help agribusiness and small businesses by 0.25 percentage point to 2.5 percent. After receiving the re-lending funds at a favorable rate, small commercial lenders will issue loans to small businesses at a rate of no more than 4.55 percent. The spread between the two interest rates is 205 basis points.

Besides, the central bank will urge small- and medium-sized commercial lenders to implement relevant policy measures under its Macro Prudential Assessment framework. Financial and taxation administrations will also launch further support to small banks, Liu said.

For those banks that meet regulatory requirements on providing inclusive financial services, the People's Bank of China will implement targeted cuts in the reserve requirement ratio for banks timely and appropriately, he said.