Develop Small and Micro Banks in the Next Stage of Financial Reform

Gateway International Group Ltd, April 2012, Pages: 8

The development of small and micro banking institutions in the next stage of financial reform must be a priority as it will assist in the adjustment of the overall financial structure, promote the movement towards market-oriented interest rates, and enhance financial development in rural areas. Various types of financial institutions should be encouraged to find their market positions in providing banking services for small and micro enterprises, and access to the financial market must be eased to encourage the development of small and micro financial institutions such as small loan companies. Well managed small loan companies should be encouraged to transform into village and town banks, and financing ratio constraints for small loan companies receiving loans from banks should be relaxed. A micro financing infrastructure must be established so as to allow various financial institutions to compete in the small and micro financial market.

I. Assist financial institutions to serve small and micro enterprises

II. Ease access to the financial market and encourage the development of small and micro financial institutions

III. Promote market-oriented interest rates and explore a sustainable business model for small and micro financial institutions

IV. Encourage small loan companies to transform into village and town banks

V. Relax financing ratio constraints for small loan companies receiving loans from banks

VI. Implement policies to reduce the tax burden on small loan companies

VII. Support the construction of infrastructure to allow micro financial institutions easy access to the micro financial market

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