Credit boost to promote commercial momentum

China will increase credit support, lower financing costs, and allow deferred loan repayments for qualified businesses, to enable speedy resumption of production and help tide over the hard times due to the novel coronavirus outbreak.

By Tuesday, the banking sector had provided funds to the tune of 1.25 trillion yuan ($180.3 billion) to support enterprises actively participating in epidemic prevention and control. Six large State-owned commercial banks and 12 national joint-stock commercial lenders together contributed 59 percent of the total. City commercial banks and privately owned banks contributed 17.5 percent, according to data from the China Banking Association.

Qiaodan Sports Co Ltd, a sports equipment manufacturer based in Fujian province, was looking for funds to purchase raw materials, to keep its machinery running and resume production at full capacity. It also started making surgical masks to satisfy the fast-growing need for personal protection gear in the country.

Industrial Bank Co Ltd, a joint-stock commercial lender headquartered in Fujian, provided Qiaodan with traditional loans and a 230 million yuan bill discounting service, which was processed automatically.

The finance director of the company said Industrial Bank, also known as CIB, ensured steady operations of the firm and helped it save nearly 1 million yuan in financing service fees through the highly efficient bill discounting service. Since the beginning of February, the bank has increased its financing for the company by 300 million yuan.

Many businesses were closed during the Lunar New Year holiday and have just resumed production. Li Junfeng, director of the financial inclusion department of the China Banking and Insurance Regulatory Commission, said: "We expect to see a higher demand for loans from small companies and individually-owned businesses in March and April."

China has launched targeted measures to support the micro-, small-and medium-sized enterprises, which have good business prospects but cannot repay loans that are due between Jan 25 and June 30 in a timely manner because of temporary difficulties amid the novel coronavirus outbreak. The country's top banking and insurance regulator has allowed them to apply for extended repayment plans, and the deadline has been extended till June 30.

During this period, the businesses will not be charged any penalty interest on overdue loans and their credit report will not be affected negatively.