SME financing not as hard as reported

Obtaining financing is not as difficult for Chinese small and medium-sized businesses as some media have reported, Su Ning, former vice-governor of the People’s Bank of China said on Monday.

In 2011, the value of the loans made to those businesses increased by 25.8 percent from the year before. That growth rate was 14.2 percentage points higher than the rate for loans that were made to large companies, said Su Ning, citing central bank data.

He said the trend is good and the situation is getting better.

He said some small and medium-sized businesses do not open corporate accounts at banks and that banks therefore cannot expect to see cash flows from those companies. Some also do not buy insurance for their employees. That partly explains why banks cannot lend to some small or medium-sized businesses.

When asked whether there are more innovative ways to relieve the financing pressures, he mentioned what are known as mirco-credit loans. Beyond that, he said there are still other ways, all of which are being improved.