The Postal Savings Bank of China (PSBC) has extended 70 billion yuan (US$10.2 billion) in loans to small and medium-sized enterprises since it started giving small loans last June, PSBC governor Tao Liming said Sunday.

The PSBC lent 300 million to 400 million yuan on average every day to small and medium-sized enterprises, and total credit was expected to exceed 100 billion yuan at the end of this year, said Tao.

The PSBC's small loan program was first launched in Henan Province last June. It targets small and medium-sized companies and requires no collateral.

The maximum loan for small business owners is 100,000 yuan, and for medium-sized firms 3 million yuan.

"The bank has achieved sustainable development in the small loan business. The bad debt ratio is less than 0.5 per cent, and the overdue ratio is less than 1.4 percent," said Tao.

Small loans were not only a response to the government's call to ease the credit woes of small and medium-sized enterprises, but also took strategic advantage of the bank's comprehensive nationwide coverage, said Tao.

"The 36,500 branches around the country, and 2.2 trillion yuan in outstanding deposits prompted the bank to achieve considerable progress in supporting small and medium-sized enterprises," said Tao.

The government has repeatedly urged state-owned and commercial banks to support capital-deprived small enterprises, which play an important role in employment and are vulnerable to the economic downturn.

(Xinhua News Agency June 8, 2009)