The top banking regulator has called on all financial institutions to improve inclusive financing to encourage lending to money-starved small and micro firms, the agricultural sector and poverty relief work.
Banks and financial institutions should continue with financial system reform, and large lenders should set up inclusive finance divisions by the end of this year, according to Guo Shuqing, chairman of China Securities Regulatory Commission (CSRC).
Noting progress in inclusive financial service improvement over the past years, Guo said during an inspection to the Industrial and Commercial Bank of China that there were still issues such as lengthy decision-making process and lack of financial products and management techniques.
The CSRC chief encouraged financial institutions to delegate the right of loan approval to lower levels as long as financial risks are under control.
To reduce financial burden on farmers, Guo said the lending rates of poverty-relief loans should be kept at an appropriate level, which, in principle, should not be raised from the current level.
Lenders should also make full use of the government's preferential policies and support startups and innovation with IT technologies such as big data and cloud computing, he said.
China has been encouraging inclusive financial services to improve weak links in the economy.
A State Council meeting last month has allowed banks to tolerate a reasonably higher non-performing loan ratio for small and micro enterprises, agriculture and poverty alleviation. Monetary and credit policy incentives will be offered to banks that increase such lending.
By the end of first quarter, outstanding loans to small firms stood at 27.8 trillion yuan (about 4.09 trillion U.S. dollars), up 14.4 percent from a year ago, while agriculture related loans was 29.2 trillion yuan, up 8.9 percent.