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By Han Wei / Jan 12, 2019 01:54 AM / Finance

Photo: VCG

Photo: VCG

China’s biggest state-owned lenders cut average costs of credit for small businesses by 1.1 percentage points in the fourth quarter compared with the first quarter of 2018, according to the top banking regulator.

The lower charges are part of a far-reaching campaign by the government to expand financial support to the private sector as economic growth slows. Authorities have taken a range of steps, including four reductions in the reserves banks are required to hold. Top officials have repeatedly pressured banks to increase lending to small and private companies.

As of the end of November, about 23.8% of total outstanding bank loans, or 33.3 trillion yuan ($4.9 trillion), were directed to small and micro borrowers, according to Zhang Jinping, an official at the China Banking and Insurance Regulatory Commission (CBIRC).

Loans to businesses with credit lines of less than 10 million yuan totaled 9.1 trillion yuan, an 18.8% increase from the beginning of 2018, Zhang said, and 3.76 million more small borrowers got loans from banks compared with the beginning of the year.

China’s State Council in November called on the country’s major commercial banks to lower average lending rates for small enterprises by 1 percentage point from the level of the first quarter. CBIRC chief Guo Shuqing said at least a third of big banks’ new corporate loans should go to private companies, and lending to the private sector should account for no less than half of banks’ new corporate loans in three years.

Related:Cabinet Urges Lower Lending Rates for Private Sector

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