BOAO, Hainan, April 6 -- Ba Shusong, a senior Chinese financial researcher, on Saturday called for progressive deregulation of interest rates for loans issued to small businesses.
In this way, micro-finance institutions can profit from their normal operation and maintain sound and sustained development, Ba said at an event launching a report he headed on the financing of small and micro-businesses. He is attending the 2013 Boao Forum for Asia in south China's Hainan Province.
As interest rates are becoming more market-based, micro-finance institutions should target small and micro-businesses, and take a "differentiated" path from large banking institutions, said Ba, a financial researcher with the State Development Research Center under the State Council, or China's cabinet.
The report shows that banks remain a major financing channel for small businesses, with 66.7 percent of the surveyed listing bank loans as their first option, but "a long wait for the loans" has proved to be a common problem.
According to the report, improving financial services for small businesses may become an important part of the country's future financial reform.
Under the prerequisite of "only loans, no savings," Ba said, it is necessary to properly relax other institutional restraints, let well-performing small-loan companies transform into banks at village and township levels, and improve their abilities to serve small businesses.