SMEs scramble for funds from private lenders

GUANGZHOU - Private lenders are charging up to 18 times the benchmark loan rate in Guangzhou, Guangdong province, with small and medium-sized enterprises (SMEs) finding it increasingly hard to get bank credit as a result of government tightening policies.

Annual private loan rates range from 72 percent to 96 percent, and in some cases up to 120 percent, in contrast to the 6.65 percent benchmark rate, according to a report in the Guangzhou-based Yangcheng Evening News.

Rates have almost doubled since end-March, the newspaper reported. It also said that many private lenders had seen business increase as much as 40 percent in the first four months of the year.