FINANCE

China Rolls Out Subsidized Consumer Loans to Boost Spending

Published: Sep. 2, 2025 4:00 a.m. GMT+8

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Eligible consumption loans will receive a 1 percentage point interest subsidy from Sept. 1, 2025, through Aug. 31, 2026.

China launched a yearlong program Monday to subsidize household consumer loans, part of a nationwide effort to cut borrowing costs and spur spending as policymakers seek to revive demand.

Under the plan, announced by the Ministry of Finance and two other agencies, residents who take out loans at 24 designated financial institutions will receive a 1 percentage point interest subsidy from Sept. 1, 2025, through Aug. 31, 2026. The policy excludes credit cards and is limited to loans that can be verified as used for consumption.

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China launched a yearlong program subsidizing household consumer loans, offering a 1 percentage point interest subsidy from Sept 2025 to Aug 2026 at 24 major financial institutions.
The subsidy is capped at 1% annually (max 3,000 yuan per borrower; 1,000 yuan for loans under 50,000 yuan) and excludes credit cards and cash withdrawals.
City commercial and rural banks are excluded, raising concerns about competitiveness and market share losses to larger banks.

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Who’s Who

Postal Savings Bank of China: Postal Savings Bank of China is one of the 24 designated financial institutions participating in China's yearlong program to subsidize household consumer loans. Its retail banking head, Liang Shidong, highlighted the bank's training and system upgrades to ensure smooth implementation of the policy, calling it a "positive driver" for retail lending.

Ping An Bank: The assistant to the president of Ping An Bank, Wang Jun, stated that the bank quickly established internal task forces and views the program as an opportunity to expand consumer lending, particularly in areas like home renovation and medical care. Ping An Bank is among the 12 joint-stock lenders included in China's yearlong program to subsidize household consumer loans.

China Merchants Bank: China Merchants Bank is one of the 12 joint-stock lenders included in a yearlong program to subsidize household consumer loans. This program aims to cut borrowing costs and stimulate spending, with China Merchants Bank participating among 24 designated financial institutions.

WeBank: WeBank is one of the six consumer finance companies covered by China's yearlong program to subsidize household consumer loans. This initiative, designed to cut borrowing costs and boost spending, allows WeBank to offer a 1 percentage point interest subsidy on eligible consumer loans.

Bank of Hangzhou: Bank of Hangzhou, a city commercial bank, is not among the institutions offering subsidized consumer loans. Its vice president, Chen Lan, expressed concern that this exclusion presents a significant challenge, creating wider rate gaps and risking customer loss to larger banks. He noted that consumer and small-business loans are vital for local economies and comprise core business for city banks.

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