Cixi seeks new funding mechanisms for micro, small-sized firms

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Category: Ningbo District

Published: Monday, 04 June 2012 10:12

Over the past week, dozens of companies in Cixi Shangjianshan Village Industrial Park were busy furnishing their workshops, updating equipments, and making preparations for production in their new plants.

An official in charge of the industrial park said they reached an agreement with Ningbo Branch of China's Industrial Bank (CIB). Under the agreement, the bank granted a loan of 80 million yuan for 45 companies in the industrial park, or an average of nearly 200 million for each company. The fund enables the micro and small-sized firms to build new workshops and purchase new equipments.

According to Wu Zhenhao, deputy party chief of Shangjianshan Village, bearing production is their pillar industry and there are hundreds of bearing manufacturers,most of which are small and micro enterprises. To boost industrial development and create industry clustering, the construction of Shangjianshan Village Industrial Park, covering 116 acres (7.7 hectares), officially stared in 2009.

Xie Zhirong, director of the Financial Service Office in Cixi, asserted the cooperation between banks and enterprises. He said: "We hailed those banks who serve the development of real economy, and we plan to reward the banks who make notable contribution to real economy." The local government encourages the financial institutions to extend their support to local economic development and urges them to increase the proportion of the investment on practical projects, small and medium-sized enterprises and issues of agriculture, farmer and rural area from 20 percent in 2010 to 40 percent this year.

Sources said that with the cut of the bank reserve requirement ratio and the contraction of private sector investment, banks are holding enough reserves. The favorable government policies eased the burden of cash-trapped micro and small sized companies facing to some degree. However, it is still difficult for these firms in securing bank loans or guarantees. More efforts from the financial institutions are needed to change the situation.