China

The central cabinet has issued a guideline detailing measures outlined at a July meeting to ease funding bottlenecks for companies, particularly smaller ones. As "downside pressures remain large" in the economy, the cabinet said it was important to ease high financing costs. While large, state-owned enterprises can take out loans at 5.8 per cent interest, borrowing costs for smaller firms can be as high as 17 per cent.

The U.S. lags the rest of the world in one significant technological area: payments. One reason we've fallen behind is the inertia of our legacy payments infrastructure, and the fact that it is more difficult to replace a working system than build one from scratch. Yet, while many Americans consider alternative payments non-essential, the rest of the world is silently surpassing us. They're building simpler, more secure commerce networks—and perhaps constructing the rails to leapfrog the U.S. economically in the process. Ingenious workarounds in areas with major political and infrastructural challenges can serve as a model for the U.S. to advance our payment system, prevent security breaches and conduct business in untapped markets.

Innovative microfinance products have led to great advances in agriculture, renewable energy, and the informal economy, and SMEs (small to medium enterprises) are acknowledged to play an important role in job creation that directly benefits the poor. How can micro-entrepreneurs best be transitioned into SMEs, and how can MFIs help these important players grow and prosper?

Panel discussion during the Asia Microfinance Forum - Shanghai, 4-8 August 2014

Alibaba Group Holding Ltd teamed up with seven banks on Tuesday, jointly offering loans of up to 10 million yuan ($1.6 million) to China's small and medium-sized enterprises as the e-commerce conglomerate looks to further build a credit rating system based on online tra

Peer-to-peer online lending is transforming China’s banking sector one microloan loan at a time. Shadow banking in China has reached a staggering $4.4 trillion, or about 20 percent of the country’s total bank assets, according to estimates by the Chinese Academy of Social Sciences published in May—substantial enough to rival the country’s formal banking system, and broad enough to be a key economic driver for the world’s No. 2 economy. Increasingly China’s shadow banking is migrating online.

Are social networks relevant for financial inclusion? The link between social media and financial inclusion is dynamic in China, where 46% of the population, or 640 million people, are active social network users. The profiles of China’s social media users are highly diverse, with some sites successfully reaching lower income users in poorer cities, remote areas, rural entrepreneurs and students. Recently, financial services offered through social media have begun to take off, with interesting potential to expand financial inclusion.

China's tight credit environment has fostered some interesting financial innovation. Pawnshops are now firmly part of China's shadow banking industry. This is the murky world in which banks and other financial institutions come up with evermore creative ways of packaging loans and other forms of credit to companies. A report just released by the Chinese Academy of Social Sciences, a top state-backed think tank, puts the value of this industry at US$ 4.4 trillion - the equivalent to nearly one-fifth of the domestic banking sector's total assets.

China's first venture capital (VC) fund focused on solely female entrepreneurship - the Wuhan Cybernaut Women's Innovation Entrepreneurship Venture Capital Fund - has been established in Wuhan, capital of central China's Hubei Province.

Entering the Year of the Horse, the pace to give more credit support to the development of SMEs continues quickening.
However, the problem of SMEs' financing difficulty cannot be solved by banks only. Seen from the international experiences and the developing trend of SMEs financing in China, more direct financing modes are in urgent need including financing through listing on the New Third Board and bond or trust products issuance.