Economic Daily:

What was the financing situation for small- and medium-sized enterprises (SMEs) and private companies in the first half of this year? Looking ahead, what steps will the PBC take to strengthen financial support for these businesses? Thank you.

Zou Lan:

Thank you. Mr. Peng will answer your questions. 

Peng Lifeng:

Thank you for your questions. Financing support for SMEs and private companies is a crucial part of promoting inclusive finance and achieving common prosperity. In recent years, the PBC, following decisions and arrangements made by the CPC Central Committee and the State Council, has focused on inclusive finance, especially for SMEs and private companies. Starting from policy guidance, funding support and capacity building, we have continuously improved the institutional mechanisms that enhance access to affordable and convenient financing.

First, we have intensified financial support for SMEs and private companies. One major step has been implementing the 25-point plan to strengthen financial support for the private economy. We've also strengthened financial service capacity, conducted regular assessments of policy outcomes and guided financial institutions to uphold the principle of treating all enterprises equally. As of the end of May, the balance of inclusive loans to micro and small enterprises stood at 34.42 trillion yuan, up 11.6% year on year, with an average annual growth rate of more than 20% over the past five years. Meanwhile, loans to privately controlled enterprises totaled 44.95 trillion yuan.

Second, we have worked to steadily reduce financing costs for SMEs and private companies. We have deployed various monetary policy tools to maintain ample liquidity and continued leveraging the effectiveness of Loan Prime Rate (LPR) reform and the market-based deposit rate adjustment mechanism. We have launched pilot programs to improve transparency around overall corporate loan financing costs, aiming to steadily lower comprehensive financing costs for privately held enterprises and micro and small businesses. In May, the weighted average interest rates for newly issued inclusive loans to micro and small enterprises and loans to private enterprises stood at 3.69% and 3.45%, respectively — down 0.66 and 0.6 percentage points year on year.

Third, we have supported more diversified financing channels for SMEs and private companies. We have leveraged the amplifying and guiding role of the bond financing support instruments for private enterprises, providing credit enhancement for their bond issuance. Financial institutions have been encouraged to issue financial bonds dedicated to supporting micro and small enterprises, with the funds raised earmarked specifically for that purpose. We have also established, improved and actively promoted a unified registration and publicity system for movable assets and rights-based collateral to facilitate financing for SMEs.

Looking ahead, the PBC will focus on the following areas to further enhance financial services for SMEs and private companies.

First, we will further improve the policy framework for financial support to private enterprises and micro and small businesses. We will launch financial service capacity enhancement programs and guide reasonable growth in inclusive micro and small business loans and private economy loans. We will strengthen the credit enhancement system for private SMEs, fully leveraging the positive role of government-backed financing guarantees, information sharing and financial derivatives to improve corporate financing accessibility.

Second, we will continue to increase financial resource allocation. We will implement a moderately accommodative monetary policy and make good use of structural monetary policy tools such as relending for agriculture and small businesses, as well as relending for technological innovation and technical transformation. We will promote well-regulated development of supply chain finance and strengthen financial support for private micro, small and medium enterprises (MSMEs).

Third, we will help enterprises achieve efficient financing connections. We will strengthen communication and cooperation with industry competent authorities to help financial institutions improve the efficiency of financing matchmaking. We will comprehensively promote the national credit information sharing platform for MSMEs' cash flows, supporting precise delivery of credit funds to underserved areas, such as first-time borrowers, start-ups and small businesses. Thank you.

Xing Huina:

We have time for one final question. Please raise your hand if you'd like to ask it.