Shanghai's Small-sum Credit Firms' Rosy Balance


The total loan balance of Shanghai's small-sum credit companies amounted to 10.9 billion yuan (US$1.7 billion) at the end of last year, according to a report released by the People's Bank of China Monday.

The annual return on capital for the small-sum credit companies in Shanghai was 11.56 percent last year, while that of similar firms in Jiangsu and Zhejiang provinces were 10.7 percent and 15.68 percent respectively.

The city had 66 small-sum credit companies at the end of 2011 as it sought new financing channels to support small businesses which face difficulties to access credit from the major commercial banks.

There were 4,282 small-sum credit companies in China by the end of 2011, seven times more than the figure in 2008. Their total loan balance stood at 391.5 billion yuan, and new loans issued during last year hit 193.5 billion yuan, according to the PBOC data.

In November 2008, the first small-sum credit company was set up in Shanghai after the city government unveiled measures to boost financial support to small businesses by forming an industry association.

The small-sum credit firms can offer loans to small businesses but are banned from accepting deposits.

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