Microcredit Lenders Emerging In China

From China Daily:

Microcredit lenders, once the quaint peripheral players in China’s mammoth financial system, are emerging from the shadows of the State-owned banks as white knights to thousands of small, cash-strapped manufacturers around the nation.

The spate of bankruptcies in the manufacturing sector, particularly in the Pearl River Delta region, has prompted the government to act by selectively relaxing credit controls three times in the past two months.

But many economists and financial experts remain doubtful as to whether the large commercial banks would be prepared to spare their administrative and marketing resources for the much less cost-effective business of making micro loans. In a recent forum in Beijing, officials and experts emphasized the importance of promoting private financing as a major source of funding to small businesses.

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