Banking institutions offer 17 billion yuan of credit loan to 75 Huizhou-based enterprises
Huizhou Central Branch of People’s Bank of China, Huizhou Financial Work Bureau, Huizhou Municipal Bureau of Industry and Information Technology, Huizhou Branch of China Banking Regulatory Commission (CBRC), Huizhou Central Branch of State Administration of Foreign Exchange jointly released aGuidance in Facilitating Enterprises in Epidemic Prevention and Control and Work Resumption with Financial Assistance. The Guidance has a total of 20 measures in 5 areas, namely momentary policy, credit loan, regulatory policy, financial platform and comprehensive services.
Till February 28, banking institutions in Huizhou had offered 17.082 billion yuan of credit loan to 75 Huizhou-based enterprises specializing in epidemic prevention and control activities, with the weighted average interest rate on loans as low as 3.78%, 157 basic point lower compared to the last year’s enterprise loan interest rate. As a result, these enterprises ended up saving 24.0995 million yuan of financing cost.
740 million yuan of special loan offered to 8 key enterprises
The Guidance specified clearly that more credit financing tools should be made available to local enterprises, including monetary policy of re-lending and rediscount, financing platforms at both provincial and municipal levels, as well as measures to boost the production expansion by enterprises specializing in epidemic prevention and control.
As for key enterprises in Huizhou, the Guidance required that Huizhou Central Branch of People’s Bank of China should develop an enterprise-specific financial support scheme and introduce a favorable interest rate within 24 hours. All selected enterprises will be entitled to access re-lending and rediscount privilege, with the overall financing cost no more than 1.6%; as for those affected enterprises that are not included in the key enterprise list, local financial institutions will offer similar favorable financial support policies.
Xingtai Modern Agriculture Co., Ltd is the largest beard-chicken breeding enterprise in Huizhou, as well as a key enterprise that has been selected by China’s Central Bank. The enterprise now encounters an unbridgeable liquidity gap when implementing production extension plan to ensure sufficient market supply. Once aware of the situation, Huizhou Central Branch of People’s Bank of China immediately set up a special task force team to speed up the loan approval procedure. Longmen Branch of Postal Savings Bank set up a green channel, ending up offering 4 million yuan of loan to the enterprise within 2 working days, which was also Huizhou’s very first re-lending loan granted to enterprises on epidemic prevention and control.
In early February China’s central bank introduced a re-lending loan worth 300 billion yuan on epidemic prevention and control, and selected key enterprises were able to apply for credit loans with favorable interest rate. Till February 28, Huizhou had helped 8 local key enterprises apply for this re-lending loan worth 740.15 million yuan, including 662.15 million yuan to 5 state-level key enterprises and 78 million yuan to 3 provincial-level key enterprises.
Financial assistance to local enterprises specializing in TCM and health care
Apart from introducing practical measures to help enterprises boost production expansion, the Guidance also proposed that financial support should be made accessible to sectors such as research and development of therapeutic drugs and vaccines, production of essential goods and logistics. Favorable policies introduced by Chinese central government will be fully utilized to cut enterprises’ financing cost and boost production expansion. By leveraging the TCM health care park project within Huizhou’s “2+1” modern industrial system, Huizhou will offer greater support to local TCM sector, and give full play to the health benefit of TCM in epidemic prevention and control and boost the rural revitalization.
A local pharmaceutical factory decided to expand production capacity but encountered financial difficulty. Huizhou Central Branch of People’s Bank of China immediately instructed Longmen Branch of China Construction Bank to provide a credit loan worth 18 million yuan, with much lower interest rate compared to current fund loan interest rate.
As for providing services to epidemic-affected enterprises in their work resumption, the Guidance proposed a series of effective measures, such as understanding of enterprise needs, optimization of credit loan handling procedure and extension of length of maturity, so as to ease enterprises’ due repayment pressure and help them resume operation as soon as possible. In addition, for those severely affected SMEs, the Guidance pointed out that they should be included in Huizhou’s Risk Compensation Fund. Huizhou will continue offering credit loan support to manufacturing, SMEs and private business, with the total loan balance no less that the total amount of 2019 and the financing cost no more than that in 2019.
As for measures to facilitate spring ploughing, the Guidance pointed out that financial institutions should take various means to satisfy the financial needs in rural areas and speed up the agriculture-related loan delivery, so as to ensure the stability of agricultural products during the epidemic outbreak.
Reported by LIU Weiwei, WEN Guobin