South China's Guangdong Province is extending its credit
database for small and medium-sized enterprises (SMEs) to give them
better access to bank loans.
The Guangzhou branch of the People's Bank of China (PBOC), which
is in charge of the work, said it will input the credit information
of 360,000 SMEs - two-thirds of the province's total - into the
database by the end of the year.
The figure does not include firms in Shenzhen, which are not
covered by the Guangzhou branch.
Xu Nuojin, the branch's vice-governor said the companies to be
included are those that have been officially registered but not yet
been involved in a credit relationship with a commercial bank.
Their basic information, legal status, business details and
financial status will be recorded on the database.
Information about their tax payments and utility fees will be
added later, he said.
"SMEs often have difficulty raising funds. The aim of the
database is to serve as a credit archive so firms can get easier
access to bank loans," Xu said.
"In turn, the banks will be able to get a clearer picture of the
firms applying for loans, so the whole process can be speeded
up."
Xu said all credit information will be kept strictly
confidential and only authorized institutions with a valid
requirement will be able to access it.
"Banks will be subject to varying penalties if they inquire
about information illegally and use it for any other purpose than
that which is authorized," he said.
Li Qingqing, an associate professor with South China Normal
University's economics department, said the credit database will be
equally beneficial to SMEs and banks.
"It will be easier for SMEs with good credit records to raise
funds and it will be easier for commercial banks to spot potential
customers," she said.
As one of the nation's 17 pilot provinces and cities selected to
set up an SME credit database, Guangdong inputted information on
11,203 SMEs in 2006.
Since then, 1,508 have been approved for credit extension loans,
while a further 336 have actually received funds.
(China Daily July 10, 2007)