China's cash-thirsty small business get more loans

China's banks extended more loans to the country's small and micro-sized enterprises, as cash-strapped companies played a pivotal role in stabilizing employment, official data showed Monday.

By the end of May, the credit balance of small and micro-sized enterprises totaled 16 trillion yuan (2.58 trillion U.S. dollars), accounting for 22.22 percent of the total, up from a proportion of 21.95 percent at the end of last year, according to Shang Fulin, Chairman of the China Banking Regulatory Commission (CBRC), the country's banking regulator.

The total balance was 1.1 trillion yuan more than the amount recorded at the beginning of 2012, and represented an increase of 21.35 percent year on year, Shang told a meeting on supporting small business, which was organized by the State Council.

The Chinese government has told banks that the credit growth to small enterprises should not be lower than that of the total credit growth. The incremental amount should not be less than that recorded a year earlier.

Shang said banks had met those targets for four consecutive years, adding that financial services for small business have become more professional and comprehensive.

Credit for small business in less-developed central and western China had grown 5.33 percentage points faster than that of the national average. More than 75 percent of loans went into the the pillar industries and improving people's lives, he noted.

"After years of efforts, we have made some achievements. But amid the current economic restructuring, new conditions and tests have emerged. Small business still faces difficulties and have to pay high rates to get loans," Shang said.

He said CBRC will continue to enhance supervision and create a better financial environment for small business.

According to the Ministry of Industry and Information Technology, small business accounts for at least 90 percent of the country's enterprises and provides 80 percent of the jobs.