China will set up a national integrated financing and credit service platform to provide information inquires and further support small and medium-sized enterprises, according to a plan aimed at strengthening the application of credit information sharing released by the State Council on Wednesday.
The plan came after China's small and micro enterprises have experienced difficulties with capital turnover due to the recurrence of COVID-19 flareups and rising prices of raw materials. Additionally, the current credit information sharing application cannot meet the financing needs of these firms, with high cost of information acquisition.
Experts noted that the plan will not only further strengthen the financial support for small, medium and micro enterprises and individual entrepreneurs, but also help address economic pressures, including shrinking demand, supply shocks, weakening expectations, the uncertainty caused by the epidemic, as well as maintaining a stable and healthy economic environment.
According to the plan, China will gradually include information on tax payments, social insurance premiums and housing fund payments into the sharing scope, and institutions, including banks, insurance and credit services, are encouraged to access the financing credit service platform.
Zhao Chenxin, a senior official from the National Development and Reform Commission (NDRC), said that as of the end of November, banking financial institutions nationwide have issued about 18.73 trillion yuan ($2.94 trillion) of loans for small and medium-sized enterprises, up 24.1 percent year-on-year. And the total loans granted through financing and credit service platforms at all levels exceeded 7 trillion yuan ($1 trillion).
Mao Hongjun, a senior official from China Banking and Insurance Regulatory Commission, said that the growth rate of loans issued by China's five large banks for small and micro enterprises in the first 11 months has reached 37.24 percent, achieving 30 percent of the growth target proposed by the State Council this year ahead of schedule.
According to the plan, all financing credit service platforms will establish a complete information security management system to assess their information security status and all institutions should strictly comply with the relevant provisions, prohibiting the use of the information for activities other than providing financing support for enterprises.
The plan said that authorities will improve the credit evaluation index system and strengthen the dynamic monitoring of the credit status of the enterprises receiving loans to improve the ability of risk warning and disposal. Malicious debt evasion will be jointly disciplined in accordance with relevant regulations.
Moreover, localities are encouraged to establish a market-based risk-sharing compensation mechanism for loans to small and medium-sized enterprises and provide loan subsidies for these firms with good credit standing.
According to a statement released by the Ministry of Finance on Tuesday, from January 1, 2022 to December 31, 2022, the deferred interest on domestic sales tax of trading companies will be exempted temporarily to promote the stable development of foreign trade and help business to ease their difficulties.
Zhao said that the NDRC, together with the People's Bank of China and other two institutions will establish a coordination mechanism of credit information sharing and application to promote the financing of small and medium-sized enterprises, as well as guiding financial resources to these companies and individual entrepreneurs to further stimulate the vitality of the market and stabilize the national economy.
