The platform will amass information about MSMEs from various sources for banks to use when providing credit to MSMEs.
China’s State Council has approved a plan to establish a national integrated financing and credit service platform to support the ability of MSMEs to access credit.
The plan is aimed at improving the ability of financial institutions to serve MSMEs, reducing financing costs, and controlling credit risk – by addressing “information asymmetry between banks and enterprises”.
Under the plan, the new National Financing Credit Service Platform will integrate information from credit information platforms, credit reporting platforms, financial services platforms, and industry information systems to provide comprehensive data on MSMEs for use by credit institutions.
The NDRC (National Development and Reform Commission), PBOC (People’s Bank of China), and CBIRC (China Banking and Insurance Regulatory Commission) will take the lead in developing the Platform, the State Council said.
The Platform will gradually integrate further information on MSMEs such as registration and licensing information, administrative punishments and court judgments, tax payments, social insurance premiums, housing fund payments, imports and exports, utility bill payments, real estate, and intellectual property.
MSMEs will be encouraged to supplement and improve their own information through voluntary reporting, which will help to smooth information sharing channels, the State Council said.
The plan includes an enhanced credit evaluation index system, improved credit evaluation models, dynamic monitoring of firms’ credit status to improve risk management, and an online arbitration mechanism for dispute handling.
MSMEs will have the right to access their information on the Platform free of charge, and to file objection appeals to restore their credit status.
The new Platform will include an advanced information security and prohibit the use of the information for activities other than for providing financing support for enterprises.
Under the plan, local governments will be encouraged to establish market-based risk-sharing mechanisms for lending to MSMEs, and to provide loan interest subsidies for firms with good credit standing.
The full plan is published here.