Financial institutions must be bold in providing more support for SMEs

At a meeting of the State Council's Leading Group for Promoting the Development of Small and Medium-sized Enterprises on Thursday, Vice-Premier Liu He stressed the need for a better development environment for SMEs as well as policies and services to help them overcome the challenges they face. In particular, Liu called for easier financing for SMEs and better protection of their rights and interests.

He said that financial institutions must improve their abilities, so that they dare, and are willing, able and skilled enough to issue loans to small and medium-sized enterprises. That sends a clear signal that it is a responsibility of financial institutions to support SMEs and they must be more willing to issue loans to them.

In 2020, despite the effects of the COVID-19 pandemic, China's GDP grew 2.3 percent and its total GDP exceeded 100 trillion yuan ($15.43 trillion).

However, uncertainties remain and the real economy needs stronger support for more robust growth.

SMEs in particular still face many difficulties, such as insufficient market demand, rising raw material and labor costs. They need more support from financial institutions to help them effectively reduce their financing costs.

To help SMEs tide over the difficulties, the government introduced tax cuts and administrative fee reductions, and provided additional sources of credit. But as well as the various assistance measures provided by the central government, financial institutions should also conduct market research to understand the credit needs of SMEs.

SMEs are a major force in ensuring social stability and employment, as well as playing a key role in making the industrial chain and supply chain more stable and more competitive. To serve them well is of key importance to the whole development landscape.

This year, financial institutions must echo the call of Liu, make good use of policy tools, and make their financial services more convenient and accessible so as to help SMEs overcome the challenges.