21st Century Business Herald:

I am particularly interested in issues related to inclusive finance. Could you provide an update on the current situation and progress of inclusive finance in China? Moving forward, how will it support high-quality development?

Lu Lei:

I'll answer your questions. Thank you for your interest in inclusive finance. We consider inclusive finance an important part of China's unique financial service system. China, especially in digital inclusive finance, maintains a leading global position. For years, the PBC has taken multiple measures to strongly support inclusive finance development, aiding private, micro, small and medium enterprises, contributing to poverty alleviation and rural revitalization, and better serving social needs. From our observations, the accessibility, coverage and satisfaction of financial services have continuously improved. The benefits of financial reform and development are reaching more and more people.

In supporting private, micro, small and medium enterprises, financial service quality and effectiveness have significantly improved. The PBC has played a key role in policy guidance and incentives, establishing support tools for inclusive loans to micro and small businesses. It has guided financial institutions to enhance their service capabilities for micro, small and medium enterprises and encouraged more credit issuance to meet the needs of private, micro, small and medium enterprises. As of late July, the balance of inclusive loans to micro and small businesses reached 32.1 trillion yuan, up 17% year on year, with 62.39 million credit accounts covering over one-third of business entities.

In supporting comprehensive rural revitalization, we've consolidated poverty alleviation achievements and continued efforts persistently. Recently, the PBC, collaborating with relevant departments, introduced new policies, including five major campaigns focusing on rural industry development, construction and governance. These aim to increase financial support for rural revitalization. As of late July, the national balance of agricultural loans reached 50.47 trillion yuan, up 11.6% year on year.

In addressing critical aspects of people's well-being, the PBC, in collaboration with relevant departments, has refined policies related to the guaranteeing of loans for business startups by increasing loan limits and including veterans and disabled individuals among the beneficiaries, thereby supporting their pursuits in employment and entrepreneurship. Specifically for economically disadvantaged students, the PBC has improved government-subsidized student loans by initiating an interest-free loan policy in 2024, enabling students to finish their education. By the end of the second quarter of this year, the balance of guaranteed loans for startups reached 293.3 billion yuan and student loans were at 208.5 billion yuan.

Our review identifies policy orientation and financial institution services as the twin pillars essential for developing inclusive finance. Effective policymaking and the robust services offered by financial institutions are both indispensable. Moving forward, the PBC will balance expansion with commercial sustainability, speeding up the development of a stable, incentive-compatible mechanism for inclusive finance. 

At the policy level, our strategies highlight development priorities, directing more financial resources towards key areas and populations to promote balanced and coordinated development between urban and rural areas as well as reinforce social equity and equal opportunities. Additionally, a sound management system along with implementation supervision are crucial for guiding financial institutions to make better and fuller use of monetary policy tools, instruments supporting debt financing and other financial instruments.

Regarding financial institutions, first, it is vital to utilize the comparative advantages of diverse financial entities and improve the durable mechanism that encourages financial institutions to be confident, willing and capable to grant loans. Second, we will embrace technological empowerment. As I just said, our nation leads in digital inclusive finance. Through sci-tech empowerment and application of data technologies, we aim to facilitate deeper integration of fin-tech and inclusive finance. This engagement will drive transformative shifts in how inclusive finance is developed and managed, thus enhancing the accessibility and convenience of these financial services.

Moreover, we plan to utilize platforms such as the Group of 20 and the Belt and Road Initiative for enhanced international dialogue and collaboration, deeply engaging in the global governance of inclusive finance. Thank you for your attention.