262b yuan financial bonds for MSEs approved by June (3)

Positivity may be tested.

According to the current situation, the issuing speed of financial bond for MSEs decreases slightly. And there is a difference compared with the expectation at the early time of the issuance of Supplementary Notice. One expert points out that it is related with the issuing conditions of financial bond for MSEs.

Supplementary Notice specifies clearly that as for the issuing conditions of financial bond for MSEs by commercial banks, banks are required to ensure that the growth rate of loans to MSEs will not be slower than the average rate of all the loans and the increment should be higher than that of the same period of last year, to give more support to enterprises with line of credit no more than RMB 5 million yuan, while satisfying the relevant laws and regulations as well as prudential supervision requirements for issuance of financial bond. Meanwhile, it requires all levels of regulatory authorities to conduct dynamic monitoring and sampling survey for the flow of capital raised by commercial banks.

Furthermore, as a fresh thing, there is no regulation to follow for whether loans to MSEs derived from the special financial bond for MSEs should occupy the bank's loan scale. There was news early this year that most likely loans derived from the special financial bond for MSEs would be included in the bank's incremental loan scale. Insider in the banking industry reveals that "the cost of issuing financial bond for MSEs is high and if it occupies the loan scale, there will be no need to issue it".

Fortunately, such news testing the bank's positivity on bond issuing is unconfirmed finally. As for the bond issuance scale is less than what is expected, Guo Tianyong, director of China Banking Research Centre of Central University of Finance and Economics says that the issuance speed of financial bond is much related with the overall capacity of the bond market. The issuance speed of financial bond for MSEs may be affected on the background that bonds are issued frequently by all parties. "The scale of less than RMB300 billion yuan in half a year is helpful for MSEs to relieve the financing pressure to a certain extent, but it is hard to play a fundamental role. It relies on 'fundamental' measures like lowering the admission barrier for financial institutions so as to solve the problem," said Guo Tianyong.

Related principal in CBRC says that since this third quarter, the banking industry has further improved differentiated management of loans to MSEs, set up special institutions in batch in the area where a lot of MSEs are situated and helped qualified banking financial institutions to issue financial bond for MSEs.

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