Yicai: 

I would like to ask, how will the NFRA optimize the structure of inclusive loans to small- and micro-businesses and loans to agriculture, rural areas and farmers in the future in order to promote a stable reduction in comprehensive financing costs? Additionally, how will the administration comprehensively utilize inclusive credit and insurance to support the development of enterprises that use special and sophisticated technologies to produce novel and unique products? Thank you.

Guo Wuping:

Thank you. The development of inclusive finance was proposed at the third plenary session of the 18th Central Committee of the Communist Party of China in 2013. After more than a decade of development, inclusive finance in China has made significant progress. The NFRA has continuously strengthened regulatory guidance. Most banks have established special departments for inclusive finance, increased the proportion of inclusive finance in their internal assessments, and continuously improved their service quality and efficiency in key areas such as small- and micro-businesses, agriculture, rural areas, and farmers to serve the real economy. As of the end of last year, outstanding loans to small- and micro-businesses reached 29.06 trillion yuan, a year-on-year increase of 23.27%. This rate is 13.13 percentage points higher than the average growth rate of all loans. Additionally, the interest rate has been decreasing annually, with the average interest rate for newly issued inclusive loans to small- and micro-businesses last year being 4.78%, a year-on-year decrease of 0.47 percentage point. Inclusive loans for agriculture, rural areas, and farmers reached 12.59 trillion yuan by the end of last year, a year-on-year increase of 20.34%, which is a relatively fast growth rate, exceeding the average growth rate of all loans by 10.2 percentage points. The interest rate also recorded a year-on-year decrease of 0.87 percentage point. These are manifestations of the inclusive financial system with Chinese characteristics.

This year, we will follow the decisions and deployments of the Central Financial Work Conference, implement the requirements regarding inclusive finance, and integrate loans to small- and micro-businesses, loans to agriculture-related entities, and loans to private enterprises to form a unified regulatory approach for inclusive credit. We will carry out assessments, evaluations, and data disclosure and, at the same time, clarify regulatory focuses. There are several aspects to this:

First, we will require banks and other financial institutions to focus on the capital needs of small- and micro-businesses and agriculture-related entities, reasonably determine the pace of credit issuance, and strive to ensure that the growth rate of inclusive loans in these two areas is not lower than the average growth rate of all loans.

Second, we will actively develop first-time and follow-up loans, ensuring that follow-up loans continue wherever possible. We encourage medium- and long-term loans that match the production and operation cycle, and promote revolving loans that can be borrowed and repaid at any time to meet the diversified financing needs of market entities.

Third, we will gradually increase the proportion of collateral-free loans for small- and micro-businesses, which reached 19.19% at the end of last year, a year-on-year increase of 2.29 percentage points. This year, we will continue to encourage banks to relax collateral requirements and increase the issuance of credit loans.

Fourth, we will strengthen regulatory oversight of financial institutions in areas such as product sales, information disclosure and fee pricing to protect private enterprises' legitimate right to autonomous choice and fair trade. At the same time, we will increase credit support for private small- and micro-businesses, ensuring that their loan growth rate is not lower than the growth rate of all loans. We will also enhance credit support for small- and micro-business owners to raise the proportion of loans and the number of accounts for small- and micro-businesses. Additionally, we will reasonably increase the loan-to-deposit ratio in counties, allocate a certain proportion of new county deposits for local loans, and provide comprehensive financial services in counties to promote balanced development between urban and rural areas and contribute to common prosperity.

For enterprises that use special and sophisticated technologies to produce novel and unique products, we will encourage banks, in terms of inclusive credit, to consider the characteristics of these enterprises. Banks are advised to apply big data, artificial intelligence, and other technologies to support credit decisions. We will actively use information about these enterprises' technological research and development, patent innovation, intellectual property, and so on, to develop exclusive financial products for them and expand the scale of credit. Additionally, inclusive insurance can be utilized. We will encourage insurance companies to strengthen insurance services throughout the entire lifecycle of these innovative SMEs. For example, we will promote distinctive insurance products such as property insurance for research and development equipment, product liability insurance, product quality assurance insurance, patent insurance, export credit insurance, and insurance for the first set of major technical equipment. These products are designed to help enterprises mitigate disasters and losses, expand foreign trade, and pursue sci-tech innovation.

We will uphold a people-centered approach in financial work, bear in mind its political significance, make more efforts in inclusive finance, and strive to build China's characteristic inclusive financial system that is accessible, beneficial, and affordable in order to better serve the real economy and the people. Thank you!