Majority of small businesses fall victim to usury  

报告称六成小微企业贷款为高利贷

(ECNS) -- Chinese banks on average fail to provide fiscal support and financial services to small and micro-sized businesses, resulting in extremely high rates of interest on 60 percent of total loans.

In an investigation report, Beijing-based online private lending service provider Rong360.com said that difficulties relating to small and micro-sized businesses obtaining loans have yet to be addressed, despite a series of favorable polices launched by the government.

Chinese banks still set tough collateral standards for small firms, who often cannot meet the demands. The report thus gave the bank a failing score of 59 points for unsatisfactory service.

Small loan companies and peer-to-peer (P2P) lending platforms got 63 and 65 points respectively. They could offer financial services to those enterprises that could not obtain loans from banks, though they usually charge incredibly high rates of interest, it said.

The report also noted that 62 percent of small and micro-sized businesses pay a yearly interest rate of 24 percent, much higher than six percent, the interest rate of a yearly loan provided by banks.

The definition of what constitutes a small or micro-sized company in China varies by sector. For industrial companies, those with fewer than 300 employees and an annual revenue of less than 20 million yuan ($3.25 million) qualify as small or micro-sized.

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