China Small & Micro Banks Development to Become Next Step in Financial Reform, States China's Economy & Policy

23 May 2012 • by Natalie Aster

The development of small and micro banking institutions in the next stage of financial reform must be a priority as it will assist in the adjustment of the overall financial structure, promote the movement towards market-oriented interest rates, and enhance financial development in rural areas. Various types of financial institutions should be encouraged to find their market positions in providing banking services for small and micro enterprises, and access to the financial market must be eased to encourage the development of small and micro financial institutions such as small loan companies. Well managed small loan companies should be encouraged to transform into village and town banks, and financing ratio constraints for small loan companies receiving loans from banks should be relaxed. A micro financing infrastructure must be established so as to allow various financial institutions to compete in the small and micro financial market.

According to the article “Develop Small and Micro Banks in the Next Stage of Financial Reform” by China's Economy & Policy-Gateway International Group (China's Economy & Policy), considering the previous reform achievements and the actual financial demands from the real economy, it is clear that financial services for small and micro enterprises are lagging, progress with interest rate marketization has been relatively cautious, and the supply of financial services in the underdeveloped rural areas and central and western China is inadequate. Due to the need for financial services in the real economy, the improvement of small and micro financial services should become the focus of the next stage of financial reform.

Article Details:

Develop Small and Micro Banks in the Next Stage of Financial Reform
Published: April, 2012
Pages: 8
Price: US$ 200,00

The full development of small and micro-sized banks can provide better services for farmers and agriculture industries, improve rural financial services, alleviate the demand for capital, cultivate and develop a competitive rural financial market, and promote economic development in underdeveloped regions by opening up new financial channels to meet the needs of farmers and small and micro-sized enterprises in rural areas. Moreover, it allows for the effective use of non-government capital, and guides and promotes the normative development of non-government financing.

More information can be found in the article “Develop Small and Micro Banks in the Next Stage of Financial Reform” by China's Economy & Policy-Gateway International Group.

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