China urges banks to devolve loan approval responsibility to boost lending

Reuters SHANGHAI | Updated on January 12, 2018 Published on June 10, 2017

China's banking regulator has urged lenders to devolve responsibility for loan approvals to boost credit to small and micro businesses, but also emphasised that risks need to be kept under control.

Guo Shuqing, who was appointed Chairman of the regulator in February, said: “It would also explore preferential policies to alleviate poverty and spur industrial development to help smaller businesses.”

Guo's comments were made at a forum on Friday, according to a statement on the website of China Banking Regulatory Commission.

“Banks and financial institutions are encouraged to, under the premise that risks are controllable, decentralize credit approval authority,” he was quoted as saying.

China had launched a plan last year to promote ‘inclusive finance’ with a target for launching financial services across all rungs of society and has urged state-owned banks to take the lead.

However, it has in the past faced difficulties in supervising the micro-finance sector, especially in the unruly peer to peer lending sector which was found to be riddled with runaway managers and pyramid schemes last year.

Guo said,“China's largest banks will establish Inclusive Finance Departments by the end of this year.”

Published on June 10, 2017
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