Caixin
Caixin Global – Latest China News & Headlines

Home >

ABOUT US

CX Tech is Caixin Global's real-time tech news portal, featuring 24-hour news, short-form analysis, and roundups from business and tech media in China.

TRENDING
Hikvision Foresees Overseas Customer Losses Amid U.S. Blacklisting
As Investors Circle Milk Tea-Makers, Experts Warn of Coming Bubble
China Online Retail Sales Growth Slows but Stays in Double-Digits
LATEST
Despite Blacklisting, Huawei Booms While Confusion Reigns Among U.S. Suppliers
Chinese Fintech Firm 51 Credit Card Raided by Police
China Net Execs Tout ‘Industrial Web’ at World Internet Conference
China Online Retail Sales Growth Slows but Stays in Double-Digits
As Investors Circle Milk Tea-Makers, Experts Warn of Coming Bubble
Hikvision Foresees Overseas Customer Losses Amid U.S. Blacklisting
Tencent-Backed E-Book Platform Partners With Disney for ‘Star Wars’ Project
iQiyi Looks to AI to Force-Feed Ads to Viewers
Popular Walking App Accused of Financial Fraud
WeWork Putting the Brakes on China Push: Report
‘No New Progress’ on Zotye Joint-Venture With Ford
Qutoutiao’s Online Literature Unit Gets $100 Million Windfall
NBA’s China Crisis Has Already Caused ‘Substantial’ Losses, Commissioner Says
Northern China Aims to Curb Toxic Air Pollution by 4% This Winter
China’s Economic Growth Dips to New Nearly Three-Decade Low
Tesla’s China Plant Is Hooked Up to State Grid Power Supply
Didi Pushes Further Into Latin America With Eye on Costa Rica
Homeowners Demand Refunds After Developer Cuts Prices
Controversial WeChat Public Account Operator Eyes High-Tech Board IPO
Burgeoning Online Marketplace in Crisis After Luring New Shoppers With Merchants’ Money
To Boost Small-Business Loans, Chinese City Wants Banks to Accept Patents, Permits as Collateral

By Wu Xiaomeng and Ke Baili / Jun 28, 2019 12:13 PM / Finance

Photo: VCG

Photo: VCG

One key problem China's credit-starved small businesses face when trying to take out a loan is that they lack collateral — concrete assets, like real estate, that a bank can seize to recoup its losses if the business defaults. 

To try to deal with this, regulators in Ningbo, a major industrial city in Eastern China, announced Thursday they are encouraging banks to accept more of small businesses' intangible assets — like patents, trademarks, and even permits to drain sewage — as collateral instead. 

Ningbo's announcement followed a Wednesday meeting of the State Council, China's cabinet, that called for more use of intellectual property (IP) as collateral. China's small and private businesses have been struggling as the economy slows and the trade war with the U.S rolls on, and Beijing has issued a series of measures to try to improve bank support for them — for example, in March the country’s five biggest state-owned commercial banks were ordered to increase their outstanding loans to small businesses by at least 30% year-on-year in 2019. 

Using IP as collateral involves challenges in both valuing the assets and, if the debtor were to default, transferring ownership, Wang Xiao, the head of Bank of China's Ningbo branch, told Caixin. For now, the practice is fairly uncommon, Wang said.

Read the full story later today on Caixin Global.

Related: Big Banks Urged to Give Small Businesses Their First Loan

Contact reporter Ke Baili (bailike@caixin.com)


Share this article
Open WeChat and scan the QR code