Bank regulator pledges better loan conditions to small, micro firms

China's banking regulator on Thursday pledged to help small and micro-sized businesses gain easier access to capital by encouraging banks to offer more loans to such companies.

The China Banking Regulatory Commission (CBRC) said in a statement released on Thursday that it aims to lower financing costs for small businesses, facilitate the companies' healthy development and improve banks' lending services to such firms.

The CBRC's statement came right after Chinese Premier Li Keqiang on Wednesday vowed to restrain banks from charging unreasonably high interest and fees to small and micro-sized businesses.

China has been trying to enhance financial support to small companies by relaxing rules on selected loans, as the country's slowing economy improves thanks to a raft of targeted stimulus measures.

Chinese lenders should set the maturity of loans to small and micro-sized enterprises based on factors such as the firms' operation characteristics and risk conditions, the CBRC said.

Also, the banks should offer loans that are tailored to meet the needs of small companies, with a flexible repayment schedule, the regulator added.

Banks also need to take into consideration the repayment capabilities of the small and micro-sized enterprises before making loans, the CBRC said.

Banks need to gather information about the firms' financial situation, owners, and the financing conditions through multiple channels, the regulator added.

According to the country's central bank, China had a total of 8,394 microcredit firms with outstanding loans of 881.1 billion yuan ($142.1 billion) by the end of June, up 18 percent and 25 percent from a year earlier, respectively.