Reform of China’s Financial Service Institutions Analysed by China's Economy & Policy-Gateway International Group

13 Mar 2012 • by Natalie Aster

The financing difficulties for small and medium-sized enterprises (hereinafter referred to as SMEs) have always plagued China’s economic and social stability, and they have become the focus of attention for all levels of government. In order to strengthen the financial support for SMEs in recent years the regulatory authorities have encouraged commercial banks to create specialized institutions for financial services, which have played a certain role but, at the same time, have also reflected many fundamental problems. These phenomena are analyzed and some strategies for reform are proposed in this article.

According to the report “The Reform of China’s Financial Service Institutions for Small and Medium-sized Enterprises” by China's Economy & Policy-Gateway International Group, in recent years, the regulatory authorities have continued to promote the development of specialized institutions for financial services because these institutions are more focused on providing financial services for SMEs. These institutions can design loan processes and access standards, and improve examination and approval efficiency, in order to meet the specific characteristics of SME management and capital operations. In addition, these specialized institutions can meet the unique “short term, frequent and urgent” financing needs and the flexible financial service requirements of SMEs and can do so with professionally managed institutions, staffed by a dedicated, full-time team, which offer a variety of products. In practice, most large banks, as well as small and medium-sized banks, have established these institutions which have had an important role in easing the financing difficulties for SMEs.

Report Details:

The Reform of China’s Financial Service Institutions for Small and Medium-sized Enterprises
Published: February, 2012
Pages: 8
Price: US$ 200,00

In recent years, in order to meet the requirements of the “six-mechanisms” regarding risk pricing, independent accounting, efficient loan reviewing, motivation and discipline, professional training, and default information reporting, put in place by the China Banking Regulatory Commission (hereinafter referred to as CBRC), commercial banks have established specialized credit institutions in order to provide financing support for SMEs. There are various forms of these specialized institutions in different commercial banks, but the following are the four most widely applied.

More information can be found in the report “The Reform of China’s Financial Service Institutions for Small and Medium-sized Enterprises” by China's Economy & Policy-Gateway International Group.

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