Shanghai is ramping up efforts to enhance its tech sector.
The Chinese financial hub rolled out a new policy allowing cash-strapped small- and midsized tech companies to get financing by pledging their intellectual property rights, state news agency Xinhua reported Sunday. The news comes just days after the release of a city-wide circular which should help improve such firms accessing bigger credit lines from large financial institutions.
The new policy is backed by the Shanghai Intellectual Property Administration, the Shanghai branch of the People’s Bank of China, and 10 other banks. It permits the city’s promising tech firms to submit their patent rights, trademark rights, and copyrights for a government assessment and mark them as collateral when applying for loans.
Lenders will establish new funding and rate-pricing mechanisms, simplify credit approval processes, and draw up rules for risk management, credit review, and due diligence, Xinhua said.
The new policy also aims to increase the number of loans granted to industrial parks housing patent owners and small tech businesses, Xinhua added.
The policy is seen as a renewed effort by Shanghai authorities to create a fair and transparent financial system for money-hungry local tech firms. Last week, the Shanghai Municipal Commission of Economy and Informatization issued a circular encouraging financial institutions to extend credit lines to the city’s tech companies considering IPOs as part of a broader policy to help them float on Shanghai’s new Nasdaq-like high-tech STAR Board.
Contact reporter Ding Yi (email@example.com)