Chinese banks urged to ramp up lending to rural businesses

Outstanding loans to rural areas already hit $4.91t in 2018.

Reuters reported that the China Banking and Insurance Regulatory Commission has called on commercial banks to fulfill special lending targets, including those for achieving faster increases in loans to farmers and other business in rural areas.

In a notice, the commission urged banks to direct more funds to poverty-stricken areas and work to secure faster lending growth, noting that outstanding loans to rural areas rose 5.6% YoY to $4.91t (RMB33t) in 2018.

Also read: Chinese banks' new loans hit record high at $477b in January

The regulator has been actively calling on banks to support the rural economy, which is made up of small firms and low-end industries which have been hard hit by ageing population and productivity decline.

The central bank has cut the amount of cash that commercial banks need to set aside as reserves five times in 2018 to encourage lending to small businesses in the private sector that are bearing the brunt of country's economic slowdown and deleveraging campaign. 

Here’s more from Reuters.