The Wuhan Economic and Technological Development Zone (Hannan), referred to as the WHDZ, has formulated plans for guaranteed business loans for small and micro-sized enterprises (SMEs), effectively alleviating their financing difficulties and supporting their development.
The guiding ideology of the scheme is to apply innovation to deal with the SME's financing problems in a scientific manner to encourage development and achieve the 13th Five-year plan in the WHDZ.
The zone will establish a government credit platform in which it guarantees enterprises' use of banks' financial products, building cooperation between the government, banks, and enterprises.
It will also help establish a new enterprise business credit mode to meet the financing needs of the region's SMEs, support their comprehensive and sustainable development, and achieve mutual benefit between government, banks and the small and medium companies.
The plans have eight aspects:
1.The WHDZ will establish a management committee to oversee the loans, and an office that the committee controls;
2.Sponsored by the district's finance bureau, the office will open special risk collateral accounts in the Rural Commercial Bank (RCB) and China Construction Bank (CCB) in the WHDZ, and fund them with 10 million yuan ($1.45 million) each.
3.The office will recommend enterprises to the RCB and CCB in the WHDZ;
4.The RCB and CCB will select enterprises for loan approval and form an SMEs pool;
5.Enterprises selected for the SMEs pool will deposit two percent of the total loans into the accounts;
6.In accordance with China's bank loan regulations, the RCB and CCB in the WHDZ will handle loan applications and approvals;
7.In keeping with loan procedures of the WHDZ's RCB and CCB, the selected enterprises will offer their own mortgages and loan guarantees;
8.The WHDZ's RCB and CCB will sign contract with the enterprises and grant loans to them, secured by both the enterprises' mortgages and the WHDZ's special accounts.
The plans will be carried out in three phases:
1. Promotion phase (March 20 to April 30, 2017)
This phase involves organizing relevant departments and units to publicize knowledge of business loans, and recommending high-quality SMEs in light of the requirements set by the departments (units), communities and sub-district offices.The RCB and CCB in the WHDZ will do the preparatory work, including launching the docking meetings and products promotion fairs.
2.Preparation phase (April 5 to April 30, 2017)
This phase consists of establishing the management committee, opening of the special accounts in the WHDZ's RCB and CCB by the committee's office, signing of the WHDZ's SMEs credit cooperation agreement with the RCB and CCB by the management committee and formulation of necessary measures related to the SMEs credit management, and allocation of the government risk compensation funds by the district's finance bureau.
3. Organization and implementation phase (since April 30, 2017)
The management committee will jointly organize the SMEs pool with the WHDZ's RCB and CCB, raise the financing guarantee fees and deposit them to the bank accounts. The WHDZ's RCB and CCB will then grant loans to the enterprises.
The program requires all parties involved to carefully organize and implement their work, ensuring effective co-ordination and obeying discipline while focusing on service.
