Vice Premier calls for greater efforts to provide financing for small businesses

Vice Premier Wang Qishan has urged the country’s lenders to increase financing to small businesses in order to ease fundraising difficulties amid the country’s current policies of monetary tightening.

Vice Premier calls for greater efforts to provide financing for small businesses

Wang made the call during a two-day inspection tour in Shijiazhuang, the capital of north China’s Hebei Province, noting that small firms are directly related to employment, economic restructuring and social stability.

He said more efforts should be made to accelerate the development of the financial industry and push forward reforms that will facilitate financing for small businesses.

The government has been tightening its monetary policies in order to combat stubbornly high inflation. Capital-thirsty small businesses have been feeling the pinch as supplies of funding decline.

The central bank has required banks to hold more of their deposits in reserve six times and hiked interest rates twice this year to contain inflation, which rose to a 34-month high of 5.5 percent in May.

The current domestic and overseas situation is extremely complicated and uncertain, Wang said.

“It is very difficult to handle the relationship between economic development, economic restructuring and checking inflation,” Wang said.

Reforming financial mechanisms through multiple measures is the key to easing financing difficulties, Wang said.

Large lenders should develop financial products and increase support for small businesses, while city commercial banks, rural banks, rural credit cooperatives and small-loan firms should try to focus their efforts on serving small businesses, rather than focusing on expansion, he said.

Wang also urged more efforts to strengthen financial supervision and regulate the financial market to prevent systematic and regional financial risks.

Xinhua

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