Government News
City offers more support for small businesses 2024-10-31
Shanghai is stepping up support for small and medium-sized enterprises (SMEs), including relaxing requirements for loan renewals and releasing more subsides.
As one of the measures, the city is expanding its seamless loan renewal program to cover all SMEs, which means companies can still get loans even if they have trouble to pay the principal. Also, the city temporarily extends the renewal policy to cover more loans of medium-sized enterprises whose maturity date is before September 30, 2027, according to the Shanghai Finance Bureau on Thursday.
The city aims to reach 1 trillion yuan (US$140.52 billion) in cumulative seamless loan renewals by 2024.
In addition, the measure proposes to optimize the subsidy policies for SMEs financing, including allocating 1 billion yuan for the 2024-2025 period, moving the compensation threshold for non-performing loans in key industries such as technology and increasing the compensation ratio to 55 percent, with an additional 5 percent for first-time loans.
These initiatives are outlined in several measures that local government has unveiled to strengthen financing support for SMEs, focusing on addressing difficulties in SME financing by effectively implementing existing policies and introducing new incremental measures.
Beyond providing loan renewal support for SMEs, the measures also propose expanding the scale of the policy-based financing guarantee fund for Shanghai's SMEs to 120 billion yuan in 2024.
According to data from the Shanghai Guarantee Fund Management Center, the city completed 94.838 billion yuan in policy-based financing guarantee business last year, surpassing the cumulative threshold of 300 billion yuan.
These adjustments aim to encourage banks to lend more to SMEs.
According to the measure, the city should establish a new inclusive financing service system based on credit information by the end of 2026. It aims to provide convenience for bank-enterprise matchmaking and financing, increase efficiency on credit collecting and sharing, optimize rules for data development and utilization, and strengthen the exploration of information value and credit product innovation.
The measures consist of nine key initiatives, with some implemented to facilitate central financial policies supporting economic development. Some coordinate city-level policies and leverage fiscal funds more effectively. Others focuse on the establishment and improvement of information platforms and financing service mechanisms to optimize bank-enterprise cooperation.
Source: Shanghai Daily
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