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Sun Guofeng, Director of the Monetary Policy Department of the Central Bank of China, said at a briefing on the new office on Thursday that he would adhere to the orientation of structural deleveraging, and that the increase in bank credit support for small and micro enterprises would not increase the overall leverage rate, but would optimize the structure of leverage; the increase in people's loans in the first quarter was mainly invested in private and small and micro enterprises, and other weak links.
On the same occasion, Zhu Shumin, vice-chairman of the Banking and Insurance Regulatory Commission, said that commercial banks should be encouraged to price small and micro-enterprise loans in accordance with the principles of "keeping costs and small profits" and business sustainability; very low pricing may lead to regulatory arbitrage, resulting in "two-way vendors" reselling funds, internal and external collusion, and supervision does not encourage the interest rate of small and micro-loan to fall below the benchmark interest rate.
"The lending rate of small and micro enterprises is lower than the benchmark interest rate. At present, it should not be, but it is all a little higher than the benchmark interest rate. Because of the relatively high cost and high risk of loans for small and micro enterprises, it is necessary to make up for the cost by pricing the loan interest rate. Zhu Shumin said.
He further pointed out that if the risk is well controlled and the bad rate is controlled below 3%, the break-even point of interest rate should be between 5% and 5.7%. If the price is set between 5% and 5.7%, such loans can achieve "low profit" and business sustainability.
Zhu Shumin also cited data that in the first quarter of last year, the lending interest rate of new universal small and micro enterprises issued by five large banks was 4.76%, down 0.13 percentage points from the fourth quarter of last year. Li Junfeng, director of Inclusive Finance Department of the Banking Insurance Regulatory Commission, pointed out that the average lending interest rate of national banking financial institutions was 6.87%, while that of lending institutions other than small and medium-sized banks and pawnbrokers. The rate is about 18%.
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