People’s Bank of China Sets Up 500 Billion Yuan Re-Loan for Technological Innovation
In a move to support technological innovation and transformation, the People’s Bank of China announced the establishment of a re-loan program with a quota of 500 billion yuan and an interest rate of 1.75%. This initiative aims to encourage financial institutions to increase their support for technology-based small and medium-sized enterprises, as well as projects in key areas related to technological transformation and equipment renewal.
The re-loan program, which follows the decision-making arrangements of the State Council, will provide funding for scientific and technological innovation and transformation projects. The program will have a term of 1 year, with the opportunity for two extensions of 1 year each. A total of 21 financial institutions, including China Development Bank, policy banks, and state-owned commercial banks, among others, will be recipients of the re-loan.
This new initiative builds upon previous programs for technological innovation and equipment renovation. By improving upon past experiences and supporting financial institutions in enhancing the quality and efficiency of their services, the People’s Bank of China aims to better meet the financing needs of companies in the fields of technological innovation and equipment renewal.
Financial institutions will have the flexibility to make independent decisions on granting loans based on company applications and industry-provided lists of eligible projects. The People’s Bank of China will review loan applications and provide re-loans to financial institutions for qualifying projects.
Overall, the establishment of this re-loan program is expected to provide credit support for small and medium-sized technological enterprises, as well as projects in key areas such as digitalization, intelligence, and green technological transformation. By guiding financial institutions to take on their own risks and support innovation, the People’s Bank of China is paving the way for future technological advancements in China.