Red Star News:

In 2020, China's real economy, especially small and micro-enterprises, has been severely affected by the epidemic. What measures has the PBOC taken to support the development of small and micro-enterprises? What is the next step? Thank you.

Chen Yulu:

Thank you for bringing up this important issue. Supporting the stable development of small and micro-enterprises is a focus of PBOC and the financial system. As you mentioned, the COVID-19 has made life harder for small and micro-enterprises in 2020. Small and micro-enterprises are key market entities as we stabilize enterprises and ensure employment. The PBOC has resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council and promptly introduced policy measures in four aspects, in coordination with relevant ministries, to firmly support the financing and stable development of small and micro-enterprises. Generally speaking:

First, we have innovated two monetary policy instruments to channel funds into the real economy. Last June, we introduced a policy to allow small and micro-enterprises to postpone principal and interest repayments on loans and rolled out a credit loan support program. These two instruments, funded by the PBOC, encouraged banks to defer payments on all-inclusive loans for small and micro-enterprises eligible for the policy accordingly and substantially increase credit loans. In the past year, the banking industry deferred on principal and interest payments totaling 7.3 trillion yuan and issued 3.9 trillion yuan in inclusive credit loans to small and micro-enterprises, an increase of 1.6 trillion yuan from the same period last year.

Second, we have built up preferential policy support for small and micro-enterprises in key areas. We have led efforts to introduce 30 measures to help fight the epidemic in the financial sector, set up a special re-loan project of 300 billion yuan for epidemic prevention and control, and bolstered support targeting more than 7,600 key enterprises in charge of epidemic prevention and supply delivery, most of which are SMEs. Per the needs of epidemic prevention and control, we have launched further re-lending and re-discount quotas of up to 500 billion yuan for the resumption of work and production and increased inclusive re-lending and re-discount quota by one trillion yuan. More than 600,000 companies affected by the COVID-19 received financial support, most of which are also micro-, small and medium-sized enterprises (MSMEs).

Third, we have enhanced commercial banks' capabilities in providing financial services for micro- and small businesses. The PBOC has actively urged commercial banks to improve their resource allocation and performance evaluation mechanisms for small and micro-enterprises and increase the weight of inclusive finance for commercial banks to more than 10%. Credit loans, first-time loans, and loan renewals without repayment of the principal have been substantially increased. Among the newly granted inclusive credit loans for inclusive small and micro-businesses in the first 11 months of last year, nearly 40% of the enterprises were granted for the first time.

Fourth, we have followed a cohesive policy to improve monetary, regulatory, fiscal and taxation, and other external policy incentives. We have worked to play a better role as a government financing guarantee institution and improve local risk-sharing and compensation mechanisms. We have implemented comprehensive policies to improve financial services for small and micro-enterprises. At the same time, we have also actively promoted the construction of enterprise credit information sharing platforms to promote the sharing of credit information among small and micro-enterprises. The accounts receivable financing platform operated by the PBOC's Credit Reference Center offered 2 trillion-yuan fund loans for MSMEs throughout the year, exceeding the annual target of 800 billion yuan.

Overall, we did a good job in financing small and micro-enterprises last year by increasing loans to more enterprises and reducing costs. By the end of last year, outstanding loans issued to small businesses under inclusive finance services stood at 15.1 trillion, up 30% year on year. Interest rates for newly granted loans to small and micro-enterprises in December were 5.08%, down 0.8 percentage points from the same period last year. In 2020, a total of 32.28 million businesses were supported, an increase of 5.24 million from the previous year.

Next, the PBOC will maintain the continuity, stability, and sustainability of policies in accordance with the deployment of the Central Economic Work Conference, continue to make good use of structural monetary policy instruments and targeted credit policies and give full play to the national accounts receivable financing platform and unified registration for pledges of movable assets and rights. This way, we will continue to strengthen support for small and micro-enterprises. Thank you.

Shou Xiaoli:

Thank you, Mr. Chen, and all the other speakers. Thanks to friends from the media. Today's SCIO press conference is hereby concluded. I wish you all a happy weekend!

Translated and edited by Liu Sitong, Zhou Jing, Liu Jianing, Cui Can, Zhang Junmian, Li Xiao, Wang Zhiyong, Zhang Rui, Fan Junmei, Zhang Tingting, Guo Yiming, Wang Yiming, Li Huiru, He Shan, Gong Yingchun, Wang Qian, Zhang Liying, Wang Wei, Xu Xiaoxuan, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.