China drafts rules to assess banks’ lending to smaller firms

BEIJING (Reuters) – China’s banking and insurance watchdog issued a draft guideline on Friday to assess banks’ financial services towards country’s struggling smaller firms.

The draft guideline will include commercial banks’ lending allocation to small and medium enterprises (SMEs) in its annual assessment of banks, according to China Banking and Insurance Regulatory Commission (CBIRC).

The guideline aims at improving the efficiency and quality of lenders’ services towards SMEs, the CBIRC said, and the assessment will kick off this year, it added.

Chinese regulators have been trying for years to direct more funding to more vulnerable smaller companies at affordable rates, and the severe economic blow from the coronavirus epidemic has added urgency to the efforts.