Global Times: China's banks beef up financing services for sci-tech enterprises under nation's call for high-quality development

BEIJING, Oct. 25, 2024 /PRNewswire/ -- China's banks pledged to enhance financing services for domestic sci-tech enterprises, particularly innovative small and medium-sized enterprises (SMEs) under the nation's call to support technology development.

The remarks were made at the three-day Annual Conference of Financial Street Forum 2024, which is held in Beijing from October 18 to 20, during which industry representatives from home and abroad discussed financial opening-up, cooperation, and economic development.

As a key focus of the forum, banking industry players have emphasized their efforts to support enterprises of scientific and technological innovation, a core of the new quality productive forces.

During the forum, Bank of Communications signed a strategic cooperation agreement with the torch high-tech industry development center of the Ministry of Industry and Information Technology, and both sides jointly released "Torch Loan," an innovative loan product, for small and micro enterprises in science and technology field in Beijing, according to a statement that the bank sent to the Global Times.

The innovative loan product offers features such as high credit limit, fast approval, and no collateral requirements, and aims to effectively solve the financing problems of growing technology-based small and micro enterprises.

Bank of Communications is not alone. During the forum, China CITIC Bank has also highlighted their efforts in providing better financial services for technology companies.

According to a statement sent to the Global Times, a representative of China CITIC Bank Beijing Branch said the development of technology enterprises requires not only financial and capital support but also operational and strategic assistance. This includes areas such as corporate governance, financial and tax planning, access to scientific and technological resources, and management of upstream and downstream orders.

In designing financial products, the bank aligns offerings with the various stages of enterprise development, including the transformation of scientific research results, start-up phase, growth phase, maturity phase, and post-marketing phase, according to the representative.

Bank of Beijing said that they have comprehensively upgraded their fintech services. As of late June, the total balance of technology finance loans of Bank of Beijing was 337.9 billion yuan, an increase of 78.7 billion yuan from the beginning of the year, accounting for 65 percent of the increase in corporate loans.

The active participation of financial institutions in supporting small and micro enterprises that face financial challenges reflects high-quality development of the Chinese economy, experts said.

These collaborative efforts by domestic banks are expected to facilitate the transition from innovation to industrialization, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times.

However, challenges persist for technology companies, particularly small and micro enterprises, in securing loans. "Many of these companies struggle to provide sufficient collateral and corresponding credit for financing. Additionally, the extended repayment periods that technology companies often encounter can pose risks for lenders," Wang noted.

"To address these issues, banks need to enhance cooperation with technology companies by gaining a better understanding of their financing needs. They must also continuously innovate their financial products and services, including risk management capabilities, while offering tailored financial solutions for businesses," Wang emphasized.

Speaking at the Annual Conference of Financial Street Forum 2024 on October 18, Huang Zhuo, deputy dean of the National School of Development at Peking University, said that banks should actively explore innovative loan products such as green bonds and socially responsible bonds to provide sci-tech companies with more financing options and with lower costs.