State-owned Bank Eases Loan Restrictions on Private Sector

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Last updated at: (Beijing Time) Friday, April 11, 2003

State-owned Bank Eases Loan Restrictions on Private Sector

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The Bank of Communications, one of the four biggest state-owned commercial banks in China, has lifted restrictions on loans to private enterprises in Shanghai asfloating capital, officials with the bank said Friday.

A spokesperson for the bank said self-employed business people or the owners of private companies, for the first time during the past five decades in Shanghai, were eligible for loans of up to five million yuan (600,000 US dollars) as floating capital.

The maximum term of the loan is one year and the sum of the loan should not exceed 70 percent of what the borrower needs.

Under the regulations issued by the bank, eligible borrowers should have a business license issued by the local government.

The loan would carry the interest rate set for small and medium-sized firms with a maximum fluctuation of 30 percent, said the spokesperson.

State-owned banks, which dominate the financial market in China, used to shun private enterprises when granting loans, but things are changing as the political status of the private sector has improved.

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