Beijing recently introduced some new policies to facilitate the financing of sci-tech startups, private enterprises as well as small- and micro-sized businesses, the connection of which with financial institutions will be strengthened after the implementation of six specific measures and one indicator system.

Resolve financial difficulties

Beijing is not only home to a large number of sci-tech startups, private enterprises as well as small- and micro-sized businesses with impressive innovation abilities, but also accumulates abundant capital, which provides fertile soil for the development of small and micro financial services.

To be more specific, Beijing is planning to build a financing guarantee platform, a financing guarantee fund of no less than 10 billion yuan and a financing guarantee group via integrating policy-based financing institutions.

The city will build a comprehensive financial service platform for small- and micro-sized businesses, enable Beijing Financial Holdings Group to play its role and make full use of big data resources and the social credit management system to boost the growth of loans on credit. It will set up a company for the disposal of invaluable assets and liquidizing of remnant assets.

To reduce financing costs, Beijing will formulate new policies to further optimize the business environment. The city will improve the mechanism for loan renewal, encourage financial institutions to make loans; It will complete the linkage mechanism between financial institutions and enterprises in Beijing and establish a corporate database.

Related government departments will organize financial institutions to connect with enterprises on a regular basis, to reduce asymmetric information.

These departments will also monitor and analyze the financing dynamics of sci-tech startups, private enterprises as well as small- and micro-sized businesses through a set of indicator systems, which is comprised of the social financing amount, comprehensive financing costs and benefits for companies.

Six financing service platforms

"Our next mission is to further optimize financing services," Li Yan, deputy director of Beijing Municipal Bureau of Financial Supervision mentioned. She added that, Beijing will step up efforts to build six platforms, that is, venture capital comprehensive service platform, financing comprehensive service platforms for SMEs, comprehensive service platforms for listed companies, the fintech public research and development platform, the promotion platform of financial development and the financial risk mitigation platform.

The first national financial big data company will be built by Beijing Financial Holdings Group in the near future; the financial comprehensive service platform for SMEs will be officially launched at the same time.

A special account of SME credit data is also planning to be opened, recommending more high-quality clients for financial institutions entering the platform, and providing services such as credit assessment and risk pre-warning to financial institutions.

To support "small, weak and scattering" financing guarantee institutions in Beijing, Beijing Financing Holdings Group will optimize the city's financing guarantee resources, set up the Beijing financing guarantee group, and focus on solving problems such as weak guarantee, lack of cooperation between the bank and guarantee institutions and incomplete risk-sharing compensation mechanism.

Only in this way, can the capital strength, external credit ratings and the risk mitigation and sharing mechanism of Beijing financing guarantee institutions be improved, the credit coverage of SMEs be expanded, and their credit acquisition rates be raised.

Besides, with the aid of the financial big data platform, Beijing Financing Holding Group will implement risk-based pricing mechanism, to improve the efficiency of business approval, and reduce the average guarantee rate and financing costs of SMEs.

Loan renewal reduces financing costs

According to Li Mingxiao, director of the Beijing Banking and Insurance Supervision Bureau, the bureau has issued guiding opinions on promoting the loan renewal of SMEs.

The Beijing Banking and Insurance Supervision Bureau will guide banking institutions to remove unnecessary sections in the loan renewal process, and carry out the loan renewing businesses under internal control and risk management.

When it comes to risk control, one document unveiled by the Beijing Banking and Insurance Supervision Bureau prohibits the renewal of special-mentioned and non-performing loans. In terms of pricing, banks are encouraged to keep the interest rate of renewed loan lower than or the same as the interest rate before renewing loans.

The city will also formulate a group of upgraded policies to improve financial, credit and business environment, to simplify procedures and reduce financing costs of these companies.

Next, Beijing will continue to explore financing channels like bond financing, equity investment and corporate listing, to constitute a complete financing service chain. It will complete the national share transfer system for SMEs, the Beijing equity trading center and the financial market system of inter-agency private equity products and services.

The city will enrich the business formats of financial institutions such as banking, securities, insurance, trust, asset management, etc., to increase the supply of financial products.

Beijing will also improve financial service infrastructure, complete the registration, evaluation and trading system of intellectual property rights, and promote the development of intangible assets such as intellectual property rights and movable mortgage financing.