China Minsheng to focus lending on small firms

Lender maximises the underserved market by lending total $15bln with $731.957 credit cap for each company.

China Minsheng Banking Corp has decided to shift its lending focus to small enterprises, and no longer considers large enterprises as the main cash cow, Dong Wenbiao, chairman of the bank said on Thursday.

"We intend to expand our credit lines to private companies, as unlike the big State-owned enterprises, they are largely underserved," Dong, a member of the Chinese People's Political Consultative Conference, said in an interview with China Daily.

Dong's remarks come at a time when the nation's top policymakers are planning more steps to help private enterprises. Under the stimulus package, most bank lending was targeted at large companies and infrastructure projects backed by the government, while small enterprises continued to languish.

The mid-sized lender last year disbursed 80 billion yuan ($11.71 billion) as new loans to small enterprises. The loans to the small enterprises have had a low defaulting ratio of 0.09 percent till now, dispelling doubts that such loans often carry more risk.

"The real test for us would be this month, when a big chunk of the loans are due for repayment," Dong said. Minsheng's bad loan ratio stood at 0.82 percent as of September 2009.

The chairman said the bank has set a lending target of 100 billion yuan ($14.64 billion) for small enterprises this year. Nearly 100,000 companies are expected to gain from the move, with the credit line for each company to be capped at 5 million yuan ($731.957).

View the full story in China Daily.