Xiangzhou District, Zhuhai

A new refinancing platform for privately-operated small, medium and micro-businesses in Zhuhai has been established with interest rates as low as 1.005 percent. The measure is a result of joint efforts of the government, State-owned enterprises and banks.

Enterprises of small and medium development size have found it difficult and expensive to refinance; the issue has become a bottleneck restricting their development. 

When borrowers want to renew their debt as the due date approaches, they have to repay the original loans first before anything further can be advanced, but due to liquidity problems they often cannot do so.

Informal debit and credit lenders do help in an unofficial monetary system but the interest is rather high. According to Zhang, the manager of a trade company in Jida which imports and exports chemical materials and feed additives, he has to pay 15,000 yuan ($2,360) interest weekly on a loan of 1 million yuan ($157,322).

However, under the new financing system he was able to make payments on his old loan and take out a new one very quickly, the whole process being completed within just three days at a one-time cost of no more than 10,000 yuan ($1,573). Previously Zhang had to wait weeks, months, or longer for refinancing.

The new capital was sourced out of the Zhuhai Dedicated Financing Fund and Zhuhai Huajin Inclusive-Finance Service, a subsidiary of the State-owned Zhuhai Financial Investment Group.

As of February 5, the platform had served three enterprises, involving 15 million yuan ($2.4 million). Qualifiers only need to provide profile information without extra personal guarantees or pledges of business assets.

A joint working committee, mainly responsible for coordination of decision-making on the platform's major issues, including financing, selection of cooperative agencies, write-off compensation, supervision and management, was set up in support of the program. It consists of the Science, Technology, Industry, Trade & Information Technology Bureau of Zhuhai, the Zhuhai Finance Bureau, Bank of China (Zhuhai Branch), and other institutions.