Mainland banks must meet higher new-loan quotas for small companies this year, a top official of the nation's banking regulator has told lenders.
In a meeting with financial institutions on Wednesday, China Banking Regulatory Commission vice-chairman Wang Zhaoxing urged the lenders to expand their loans to small businesses at a rate no slower than their overall loan growth.
Small enterprises, an important source of employment, have been struggling to survive this year amid a domestic and global economic slowdown, rising raw material and labour costs, an appreciating yuan that is eroding exporters' profitability and tight monetary policy.
Various overseas investment banks have said the People's Bank of China last month increased this year's lending quotas for national banks by 5 per cent and regional lenders by 10 per cent to help finance small and medium enterprises and agriculture.
However, the central bank has made no announcement of the decision.
Economists believe that after the quota expansion, additional loans of between 180 billion yuan (HK$205.81 billion) and 210 billion yuan will be granted.
'Bank loans to small companies will be appraised separately. A different interest rate should apply to the loans, fluctuating reasonably on the basis of risk evaluation,' Mr Wang said without specifying the rate to be charged or whether it should be higher or lower than other loans.