World Bank and China's central bank and banking regulator are due to host a symposium on small loans for China's micro, small and medium-sized enterprises (MSMEs) later this week in Beijing.

Leading officials from the China Banking Regulatory Commission (CBRC), People's Bank of China (PBC) will make presentation at the symposium, which is slated for April 15 and 16, said a spokesperson for the World Bank China Office.

The symposium aims to further build awareness and consensus on the key issues for promoting healthy and commercially sustainable MSMEs financing.

The bank said the workshop will help clear misunderstandings on MSMEs finance, introduce successful cases, and identify critical preconditions for nurturing development of MSMEs lending in China, as well as the key strategies and steps that need to be developed.

The World Bank said China's micro, small and medium enterprises (MSMEs) have become the major driving force for economic growth and development over the last decade. MSMEs are contributing more than 60 percent of China's gross domestic product, providing 75 percent of employment, and generating half of the exports revenue and tax payment. China needs to promote even faster development of MSMEs in order to sustain economic growth and development.

The bank said constraints for MSME finance have not been removed. But the problem is even more stark and serious for those micro- and small enterprises (MSEs) with short history. The problems lie in misunderstanding of MSME finance, legal and regulatory constraints, lack of lending infrastructure in general, as well as problems in the banking system.

Looking ahead, there is still a long way to go in promoting commercially sustainable MSME finance in China. In the past year and particularly since the second half of 2004, senior financial and government leaders strongly advocated commercially sustainable MSE finance in China. They encouraged bringing in successful international practices especially those that have a proven track record, said the bank.

All indications point to a micro and small lending revolution unfolding in China, which is consistent with the UN initiative to designate 2005 as the Year of Microfinance, said the bank.

"Progress in promoting commercially sustainable microfinance will facilitate the growth of a more equitable and harmonious society in China."

The symposium is expected to focus on MSEs lending as key elements, principles and methods that are common to the successful cases in other countries will be presented. External conditions for building commercially sustainable MSE lending business, including legal and regulatory aspects, accounting and taxation rules, credit information reporting systems, as well as supervisory framework, will be examined. In addition to theoretical and policy presentations, cases of specific countries will be presented and analyzed.