UPDATE 1-China to increase SME loans from big banks by 30% in 2021

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BEIJING, March 5 (Reuters) – China aims to boost lending to small businesses from large commercial banks by over 30% in 2021, according a work report unveiled at the annual meeting of parliament on Friday.

The government will also allow small enterprises to defer principal and interest repayments,guide banks to lower loan rates and support companies and industries hit by COVID-19, said Premier Li Keqiang, who read out the work report in Beijing.

Big commercial banks boosted lending to micro and small businesses by more than 50% last year when the pandemic disrupted businesses and shut shops down for months.

Beijing will also strengthen oversight over financial holding companies and financial technology to ensure innovation follows regulation, Li said. It also aims to move faster to promote the sharing of credit information.

In last year’s work report, the government said innovations in financial technology and big data should help lower financial service costs. The sentence was taken out in this year’s report.

China suspended the initial public offering of Alibaba’s Ant Group last November and its financial regulators have urged the company to come up with an overhaul plan as they strengthen fintech regulation.

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