Small businesses targeted for loans

China yesterday unveiled measures to boost lending to small and micro-sized enterprises as the government tries to inject momentum in the economy.

"Although China's economy is improving, downward pressure remains as the country is striving to restructure the growth model," the State Council, China's Cabinet, said in a statement on its website yesterday.

"Easing high funding costs faced by enterprises, especially small and micro-sized companies, is important for China to stabilize growth, push forward reforms, rebalance the economy and improve livelihood."

The People's Bank of China should keep a prudent monetary policy and adopt various tools to ensure moderate liquidity while enhancing credit supply to small businesses. It should increase funds for shantytown renovations, railway projects and industries of service, energy-saving and agriculture, the statement said.

China will encourage commercial banks to simplify approval procedures and cut the vetting period for loans to small businesses, as well as allow banks to directly extend loans to qualified firms.

China will support small and micro-sized firms to raise funds on the over-the-counter market, said the statement. The government also vowed to lower the threshold for commercial banks to issue bonds for small companies and agricultural businesses.

Premier Li Keqiang has pledged financial support to the real economy while keeping credit at a proper level.

The PBOC said earlier that 14.17 trillion yuan (US$2.3 trillion) in outstanding loans were granted to small businesses at the end of June, an increase of 15.7 percent year on year.