Money

CBRC to lend more to rural areas, SMEs

(Xinhua)
Updated: 2011-02-25 10:32

BEIJING - China's banking regulator said Thursday that it would seek to increase loans from the country's banks to the agriculture industry and rural areas, as well as extend more credit for small enterprises this year.

The China Banking Regulatory Commission (CBRC), regulator of the country's banks, said in a statement on its website that it would guide financial institutions to expand their network in rural areas and increase their agriculture-related loans.

Related readings:  China plans to increase lending to agriculture  Investment targets grain production  Govt to provide further support to local SMEs  CBRC to adopt new regulatory framework

According to CBRC's statistics, Chinese banks' new loans to agriculture-related businesses and rural households topped 2.63 trillion yuan ($399.7 billion) in 2010, bringing the country's outstanding agriculture- and rural areas-related loans to 11.77 trillion yuan by the end of 2010.

As for bank loans to small businesses, the CBRC said commercial lenders should ensure that the growth of new loans they give to small enterprises in 2011 must be no less than the average level of credit growth this year.

China's banks lent 1.84 trillion yuan to small enterprises last year, mainly in sectors of manufacturing, wholesale and retail, water resources, environmental protection and public facilities management.

Further, Chinese banks' outstanding loans to small businesses were 7.27 trillion yuan by the end of last year, or about 24 percent of their corporate loans, 0.8 percentage points lower than in 2009.

China's new yuan-denominated loans rose to 7.95 trillion yuan last year, exceeding the government's target of 7.5 trillion yuan.

Compared with medium and large companies, agriculture-related businesses and small enterprises have long been underserved by Chinese banks as commercial lenders were reluctant to issue loans to them due to the high risks and, instead, preferred to lend to large state-owned companies.

By the end of 2010, 2,312 towns or townships in China were still short of branches of financial institutions, according to CBRC.