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Shanghai planning to revitalize domestic financial market

By  He Wei  (China Daily)

08:33, March 14, 2013

Shanghai, the Chinese mainland's best candidate to become an international financial center, is mapping out plans to revitalize the domestic financial market by giving private capital better access via a series of pilot programs.

One such endeavor is the introduction of the financial brokers system to quench the funding thirst of small-cap firms while regulating the market, according to sources affiliated with the municipal government.

The idea of financial brokers derived from the sharp contrast between cash-strapped small-cap firms and an immense network of underground lenders that makes financing accessible, said Fan Yun, chairperson of Shanghai Fushen State Assets Evaluation Co Ltd.

"Since many SMEs fail to reach the threshold for obtaining direct loans from banks, they have already turned to these intermediaries. But as the majority are non-registered agencies, we do want to regulate them into a legal framework," said Fan, a national legislator from Shanghai and economic adviser to the municipal government who led a research team in June to study the credit crunch among SMEs.

A finance broker is a type of commercial broker or middleman who helps clients evaluate their current financing needs and identify the best way to meet them, Fan said.

The job involves investigating a wide range of lending opportunities and then assisting the customer in applying for and ultimately securing the best financing option available.

Hundreds of such financial service intermediaries are running across the city and extending top-notch services to small corporate borrowers, said Dai Jie, head of the international cooperation office of the Shanghai Small Enterprises Center, which is under the auspices of the Shanghai municipal government.

Dai said many of these middlemen used to work as bank creditors so that they know how to pursue options that work well with the operating budget of a client. They are well acquainted with the lending policies and seek to identify and secure the best mortgage deals for clients.

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Email|Print|Comments(Editor:HuangBeibei、Liang Jun)

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