Via China Daily

Workers manufacture mechanical components at a factory in Huanggang, Hubei province. [Photo by Wang Jing / China Daily]

China’s commercial banks will continually increase lending to small businesses with sound tax payment records to ease shocks from the coronavirus pandemic, the country’s tax authorities and bank regulators said on Wednesday.

That means small and micro enterprises, which cannot provide collateral or guarantees for loans, can share their tax payment information with commercial banks to get funding. More loans through this channel have been issued to an increasing number of small companies during the virus outbreak, they said.

Outstanding loans through this service have reached 573.2 billion yuan ($80.92 billion) so far, an increase of 76 percent from a year earlier, according to Li Junfeng, head of the inclusive finance department of the China Banking and Insurance Regulatory Commission, who said this instrument is significant in easing financing difficulties of small and private companies.

The commission plans to evaluate commercial banks’ services to small and micro firms. Regulators urged the lenders to increase credit loans, which will be an important criterion to assess banks’ performance, Li added.

Han Guorong, an official with the State Taxation Administration, the nation’s tax authority, said the model will be expanded to cover more self-employed people, especially in industries such as retail, catering, tourism and logistics.

READ ALSO  China manages a V-shaped recovery: The Economist