Critics point to flaws in China’s SME loan rules

China has initiated efforts to boost lending to small businesses, but some critics now say the rules imposed on banks to heighten their SME lending levels may be too rigid. Reports by South China Morning Post on Tuesday (Dec. 20) said the China Banking Regulatory Commission’s efforts, which began two years ago, may be too strict as some industry stakeholders debate whether the regulations are necessary to jumpstart SME lending. The commission imposed minimum lending requirements for banks, requiring that lenders provide no less financing to SMEs than the banks’ average credit growth rate. The rules also require that the number of SME borrowers must remain at least at par and for loan approval rates to be no lower than they were a year prior. Read more: