In yet another move to steer loans to the cash-starved private sector, China’s central bank doubled its criteria for credit lines that qualify lenders for small-business loan incentives.
Under the new policy, companies with bank credit lines of less than 10 million yuan ($1.5 million) now are seen as small and micro enterprises, the People’s Bank of China said Wednesday in a statement. Previously, small-business lending benefits were linked to credit lines of less than 5 million yuan.
China’s policymakers are making concerted efforts to bolster the private sector in the face of slowing economic growth. Since last year, the central bank has taken a series of steps to expand credit supply to private companies, including targeted reserve requirement cuts and bond tools.
Under current rules, banks that lend as much as 1.5% of their credit portfolios to small companies can qualify for a 0.5 percentage-point reduction in their reserve-requirement ratio. Those that lend more can qualify for an even lower requirement.