China small loan companies number more than 1,300

16:46, March 26, 2010      

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At the end of 2009, China had a total of more than 1,300 small loan companies with more than 14,000 employees.

At the end of 2009, China's small loan companies already received over 94 billion yuan in fund sources and extended loans of over 70 billion yuan that accounted for 0.19 percent of the banking industry's total, said Geng Li, director of the Department of Financial Market of the Research Bureau under the People's Bank of China (PBC) during the Second China Microfinance Investor Conference.

Geng added that there are small loan companies in every province and municipality of China except for Tibet, Hainan and Hunan. Inner Mongolia Autonomous Region has 149 small loan companies, the highest among all provinces and municipalities, followed by Hebei, Anhui, Zhejiang and Shanxi.

Small loan companies refer to limited liability companies or joint-stock limited companies designed to operate small-sum loan businesses without receiving public deposits. Currently, China's small loan companies mainly service private micro-enterprises, and also offer loans to individually-owned businesses and farmers.

Since small loan companies mainly service small and medium-sized enterprises and the low and middle-income population, the emergence of qualified small loan companies is significant in perfecting an inclusive financial system that features equality for all, said Jiao Jinyu, deputy president of the Management Commission of the Graduate School under the PBC, during the conference.

In terms of fund sources, China has strict regulations on the financing of small loan companies. The China Banking Regulatory Commission and the PBC clearly stipulate in the "guiding opinions on the pilot operation of small loan companies" that the major fund sources for small loan companies are capital funds paid by shareholders, donated capital and the capital borrowed from the maximum of two financial institutions in the banking industry. The amount of funds that small loan companies borrow from the financial institutions should not be more than a half of their net capital.

By People's Daily Online
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