A top official from China's central bank promised to take more measures to support SMEs which are facing financing difficulties.

Su Ning, Deputy Governor of People's Bank of China, illustrated four policies to be adopted on that regard, according to a report by People's Daily on March 10.

Firstly, commercial banks are supposed to support those small and medium-sized enterprises which previously had good performance but are currently facing difficulties because of the international financial crisis. Commercial banks will provide M & A loans to encourage more competitive small and medium-sized enterprises to purchase the less competitive ones and achieve structural optimization.

Secondly, it is necessary to promote the development of small and medium-sized financial institutions and to encourage commercial banks to set up special service offices for small and medium-sized enterprises.

Thirdly, priority has to be given on improving the guarantee system for SMEs. At present, more than 40% of large enterprises loans are provided without collateral or secured credit, and SME credit loans accounted for only 15%. The central bank will continue to promote the Registration of Pledge Receivables system. Through this system, SMEs can use current claims, including receivables, to make a pledge to the bank to apply for a loan.

In addition, a credit system for SMEs must be in place as early possible. At present, the central bank has collected credit information from 1.5 million small and medium-sized enterprises, of which one-third have obtained bank loans.

Statistics show that in January, the newly added 522.9 billion yuan long-term loans are mainly invested in railways, highways, airports and other projects of the 4 trillion yuan stimulus package from the government. SMEs didn't get much of the loans.

Su Ning insisted that it was "normal" that the growth rate of loans to SMEs is not as high as the government investment projects loans. Because the rapid growth of government investment projects loans is the immediate result of the implementation of expanding domestic demand policy.

When the government tries to expand domestic demand, especially investment, they often invest in projects, which in turn bring about more investment and stimulate the development of related enterprises. That is why at the initial stage the growth rate of loans going to government investment projects is faster than that of manufacturing enterprises.

Su said that the SME loan growth was noticeably accelerating. At the end of last year it witnessed an increase of 13.5%.

On the other hand, many SMEs are financing through discounted notes. Notes financed totaled 623.9 billion yuan in January, which, to a certain extent, has eased the financing difficulties of small and medium enterprises.

"Therefore, we can not simply say banks don't give much support to SMEs," said Su.

By People's Daily Online