China to Put up More Private Banks to Finance SMBs
The Chinese government says it will develop small-sized financial institutions and open up the channel for private capital to enter the financial sector.
"We will promote trials by private capital to initiate the establishment of private banks responsible for their own risks, as well as financial leasing companies and consumer finance companies and other financial institutions," says the government.
The government says the establishment of small banks and credit companies will be be concentrated in areas dominated by small firms.
Under the guidelines, banks will be encouraged to widen credit securitization to help channel more credit to small firms and qualified banks will be allowed to issue special bonds and use the proceeds to support smaller firms, the cabinet said.