ABC Improves Credit Service System for Small and Micro Businesses
OREANDA-NEWS. December 18, 2013. In order to implement the requirements of the State Council, the central bank and China Banking Regulatory Commission on finance serving small and micro businesses, Agricultural Bank of China Limited (ABC) fully taps into its traditional advantages in serving small and micro businesses in recent years.
It also keeps improving the related credit service system and actively promotes real economy restructuring and transformation & upgrade. Up to the end of September 2013, ABC loan balance for small and micro businesses reached RMB782.7 billion, up 19.3% than the beginning of the year, and over 240,000 clients were supported. Both loan growth and increment realized the “no less than” for four consecutive years.
To clarify service priority and perfect credit policies and systems, ABC issued the Management Measures for Credit Business for Small and Micro Businesses, the Management Measures for Credit Extension for Small and Micro Businesses and the Supplementary Regulations on Credit Rating for Small and Micro Businesses this year. A set of specialized credit policies and systems was customized for small and micro businesses from perspectives of basic systems, comprehensive management systems and credit product systems to expedite their development.
To expand the scope of credit services and address problems of high threshold of credit business and difficult access for small and micro businesses, ABC adjusts the access standard and delegates the classification authority to grant policy support for access of the clients. It delegates the client classification authority entirely to tier-one and lower branches to include more clients of the kind into ABC credit services.
In response to the realities of small and micro businesses such as small size, low assets and difficulty in securing high credit rating with banks, ABC lowers the rating standard, improves the benchmark rating and adjusts related policies to cater to their operational features. A large group of small and micro businesses with sufficient second source of repayment and low actual risks achieve noticeably better rating.
In order to address the difficulty in credit extension for small and micro businesses, ABC innovatively devises seven credit line appraisal methods such as “orders”, “earnings” and “cash flow” for .the businesses of different types and in different development stages. The diversified and practical credit extension methods better meet the demand of the market and clients.
In response to the “short, small, frequent and urgent” credit demand of small and micro businesses, ABC further streamlines procedures.
When the businesses apply for standardized credit products such as simple loan and workshop loan, credit extension and credit utilization can be handled simultaneously. Except for incremental credit and mid/long-term loans, other credit businesses can be transacted without meeting approval. Small credit demand of macro businesses can be transacted through personal credit channel with simpler procedures.
Dedicated to the principle of specialized business and delicacy operation, ABC implements the strategy of client sediment. Marketing, investigation, review and approval of small and micro businesses are all completed at tier-two and lower branches. Currently, ABC sets up dedicated review teams (positions) for small and micro businesses at credit review and approval centers with tier-one and especially tier-two branches. By realizing “one investigation, one review and one approval”, it has effectively improved the work efficiency and quality.
For small and micro businesses within supply chains, business districts and industrial clusters, ABC innovates in its service mode. By relying on quality large and medium-sized core enterprises, it realizes batch marketing, batch reporting and batch approval via the “batch credit extension” mode of a “credit factory” for upper-stream and downstream small and micro businesses and practices.
In order to strengthen risk management, ABC enhances analysis and application of “three products and three tables” for small and micro businesses, and sets up Internet financing platforms to explore corporate business information to solve asymmetric information. It requires risk management responsibilities to be further clarified for credit investigation, review, approval, credit utilization and post-loan management to ensure loan safety.