Banks extend financial support to snow-ravaged regions

Updated: 2008-02-04 10:07

The Bank of China has extended emergency loans of more than one billion yuan (US$144 million) to enterprises affected by the worst snow disaster to hit the country in five decades, a spokesman said in Beijing on Sunday.

The credit is mainly targeted at energy, oil, petrochemical, telecom, transport and power generation companies in the central, southern and eastern areas that are crucial to the resumption of local industry, said bank spokesman Wang Zhaowen.

Guizhou Power Construction Company, a subsidiary of the State Grid in charge of power supply for southwestern Guizhou Province, received 200 million yuan, the biggest chunk of the loans.

The snow and the accompanying frost that started on January 12 damaged 4,323 transmission wires in the province and led to blackouts in 50 counties and cities. With the capital input and the assistance of military troops, the company said 38 cities and counties had power restored by Friday, while 1,886 electrical wires had resumed transmission.

A Bank of Agriculture spokesman said on Sunday that about 3.2 billion yuan in emergency loans had been extended to the worst-hit Hunan, Anhui and Jiangxi provinces and Chongqing Municipality to bankroll power generation, mining and transport companies.

Central Hunan Province had received 1.5 billion yuan, with another two billion yuan still to come.

Bank President Xiang Junbo said more credit would be allocated to the snow-hit regions while the loan terms could be extended if debtors had trouble paying back money on time.

Privileges would also be extended to large supermarkets, wholesale markets specializing in farm produce and logistical and distribution companies, he said.

As snow has disrupted transport, making it difficult to deliver cash to branches, the People's Bank of China, the central bank, asked its local offices late last week to ensure cash supplies and to place them where they are most needed.

To secure rising demand for capital, the Bank of China's Zhuzhou branch in Hunan has even started door-to-door services and delivered 219 million yuan to corporate customers as of Sunday.

In Duyun, Guizhou Province, where power and water supply had been out for six days, local branches used their own power generators to ensure the operation of five outlets.

China's "big four" banks, which also includes the China Construction Bank and the Industrial and Commercial Bank of China, have so far provided a combined 42.85 million yuan in grant aid.

The Bank of Merchants donated another six million yuan through the China Red Cross.

(For more biz stories, please visit Industry Updates)

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