China's banking sector steps up small and micro businesses' support

The banking sector will continue to support the development of the real economy and the development of small and micro businesses, said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC) at the second ministers' corridor on Tuesday..

The market shares of state-owned banks in China have dropped from over 50 percent to 28 percent in the past 10 years. While the number of private banks and small-and medium-sized banks, the type which mainly accommodate small and micro businesses as clients, are increasing.

The state-owned banks have also set up an inclusive financial department, which aims to protect small and micro businesses' right to enjoy financial service.

The expansion of the loan service to small and micro businesses and startups isn't without risks, the banking sector is facing common challenges in acquiring information about the use of the loan and lower the rate of bad loans.

To address the challenges, many domestic banks such as the Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB) and WeBank have been using Internet and big data to expedite the loan issuing process and lower the bad loan rate. The CCB has managed to lower bad loans to just one percent.

Guo also noted that insurance now has a total investment fund of about 16 trillion yuan, which can also be invested in private enterprises and small and micro enterprises, and improve management methods and structure.

Guo noted that more work needs to be done in the securities sector, especially in the capital, stock and bond markets, as well as direct financing.

"We must build a stronger capital market, which can better support the development of innovative enterprises," Guo says.

He emphasized the development of multi-level capital markets, which include large exchanges, regional equity markets, as well as private equity and venture capital funds.