On October 14, the State Council Information Office held a press conference to discuss increased support for enterprises. Cong Lin, Deputy Director of the National Financial Supervision Administration, highlighted the establishment of a coordination mechanism aimed at supporting micro and small enterprises with financing. This initiative arises from thorough research and the adoption of best practices from relevant mechanisms. It emphasizes leveraging the advantages of the Party’s leadership and the socialist system with Chinese characteristics, enhancing collaboration between central and local governments to address the financing challenges faced by small businesses and banks.
During the conference, Cong elaborated on this initiative through three main aspects: who is involved, how it will be implemented, and the goals to be achieved.
First, regarding “who is involved,” at the national level, the Financial Supervision Administration and the National Development and Reform Commission lead the initiative, working alongside various departments and banking institutions. Their mission is to coordinate and align industrial, tax, and financial policies to create a synergistic effect. At the local level, provinces, cities, and districts must establish corresponding working mechanisms, tailoring their strategies to local conditions to ensure the successful execution of tasks. Particularly at the district level, special working groups will be established to facilitate visits to enterprises, assess their needs, and recommend financing options. Banks will also form dedicated teams to mobilize internal resources, encouraging grassroots institutions to proactively engage with the financing requirements of small businesses.
Next, on “how it will be done,” districts are crucial as they are closest to enterprises and have the best understanding of their needs. The working teams in these areas must balance their focus – engaging both with businesses and banks. This involves organizing visits with relevant agencies and banks to gather information about the operating status and financing needs of micro and small enterprises. They will communicate policies designed to assist businesses, bridging the gap between the policies and the businesses’ perceptions. Qualifying enterprises will be referred to banks, which will then make credit decisions based on market principles, legal guidelines, and the bank’s own credit approval criteria. In a nutshell, small businesses that operate lawfully, maintain a fixed location, perform well, and have genuine financing needs for compliant purposes will be able to secure the necessary funding through this mechanism.
Finally, regarding the “goals to be achieved,” three key objectives were outlined: First, to ensure that low-cost credit reaches the grassroots level, effectively closing the “last mile” in delivering benefits to enterprises and the public. Second, to enhance speed and convenience, with banks expected to make credit decisions within one month. For eligible enterprises, banks should establish green channels to streamline processes and accelerate approvals. Third, to maintain appropriate interest rates by minimizing information collection costs, reducing intermediaries, and subsequently lowering overall costs and additional fees associated with financing for micro and small enterprises.
