Shanghai's first small-sum loan companies have launched operations, the Shanghai Financial Services Office said yesterday.
Financial authorities will also step up the opening of similar firms and endeavor to establish Shanghai's first rural bank.
The first batch of eight such companies are from five rural districts ?? Songjiang, Jiading, Baoshan, Pudong and Qingpu, the financial services office said yesterday.
The office is the main regulator for the business.
The registered capital of the eight companies ranges from 50 million yuan (US$7.32 million) to 200 million yuan.
Investors can set up small-sum loan companies in the city's 10 districts or counties with rural business including Minhang, Jinshan, Fengxian, Nanhui and Chongming.
Such companies can't take public deposits and are encouraged to offer loans to rural family firms and mini-enterprises.
To set up such a company, investors should be registered in the area with net assets of at least 50 million yuan. Investors for small-sum credit companies are also required to have made combined profits of more than 15 million yuan for three straight years.
Most of Shanghai's 300,000 small businesses find it difficult to gain lending from banks, said Li Nianzheng, director of Shanghai Small-Sized Enterprises (Trade Development) Service Center.
(Shanghai Daily November 11, 2008)
