The city of Wuhan, in Central China's Hubei province, is making efforts to optimize its financing environment and promote the stable development of small, medium and micro enterprises with eight measures issued on Sept 17, according to Changjiang Daily.
1. Further increase policy-based relief loans
Wuhan is expanding the policy-based relief loan quota from 60 billion yuan ($8.87 billion) to 100 billion yuan. The additional 40 billion yuan will mainly be used to issue policy-based financing guarantee loans to enterprises, and the government is providing credit enhancement support, focusing on supporting new technologies, new industries, new formats, new models and light-asset, unsecured small, medium and micro enterprises.
2. Establish a government financing guarantee agency
The Wuhan Financing Guarantee Co, with a registered capital of 2 billion yuan, is to be set up to provide enterprises with quasi-public products and services.
3. Establish risk compensation fund pool
Wuhan is to establish a loan risk compensation fund pool of 2 billion yuan for small, medium and micro enterprises, and compensate financial institutions for actual risk losses incurred by the policy-based financing guaranteed loan business and online credit loan business.
4. Reduce corporate financing loan costs
The annualized guarantee rate of policy-based financing guarantee loans will not exceed 1 percent, and the enterprise guarantee fee is waived for financing guarantee loans not exceeding 1 million yuan, fully subsidized by the government.
5. Smooth green channels for service companies
Wuhan will set up a new credit and loan mechanism. It will use applets to set up push notifications, reminders, supervision and other functions to facilitate enterprises and functional departments to stay aware of the progress and results of processing in the first instance.
6. Establish a negative list management system
Wuhan will establish a credit reward and punishment mechanism to encourage and support honest and trustworthy companies, impose restrictive punishments on untrustworthy companies, and incorporate untrustworthy behavior into the company's credit records.
7. Implement the main responsibility of departmental units
Wuhan will add corporate financing service items to the municipal, district, and sub-district government service centers to provide one-stop services for corporate financing. It will also formulate qualification review standards based on national industrial policies and industry characteristics, screen and determine the list of key supported enterprises, and provide full tracking services.
8. Establish a due diligence liability exemption mechanism
All financial institutions and government financing guarantee institutions will implement a due diligence liability exemption mechanism, in accordance with relevant requirements, to promote the sustainable and healthy development of financial services for small and micro enterprises.
