According to a researcher, the big banks of China are not lending more to the smallest firms. Instead, they are 'faking' their microloans indicating that the state drive to increase micro-lending is struggling.
The researcher is Ba Shusong from the Development Research Center, a think-tank that provides advice to the Chinese cabinet. She observed that the larger banks are requiring tough collateral standards for small firms who often are unable to meet the stringent requirements.
As a result, small Chinese companies are left without bank financing. She cited a study on the funding conditions for small and microsized firms.
The Chinese government wants to increase financing for small and medium businesses and has ordered that state controlled lending institutions increase their loans to avoid the 2011 cash debacle.
According to Ba, "Everyone right now talks about financing for small and microsized firms. There is a portion of big banks who are faking their lending to small and microsized firms."
Join the Conversation