OREANDA-NEWS. May 20, 2011. Thanks to a loan from ICBC last year, Lao Li, the owner of a small television production company in Beijing, was recently relieved and happy to complete shooting a new TV series, which was nearly suspended due to shortage of funds. His new TV drama would soon be on air in several provincial satellite TV stations. The "account receivable factoring" is a new service introduced by ICBC for television production company to sell the account receivable from TV station, reported the press-centre of ICBC.

The service aims to provide financing for small cultural companies with little fixed assets like Lao Li's. With such innovative service, Lao Li can pledge accounts receivable to ICBC that TV stations pay to buy the broadcasting right of his TV dramas, and apply for loans to meet his financing needs. An ICBC official said, this new business model was greatly welcomed with pilots in Beijing. Within half a year, ICBC has offered loans of RMB 55 million to many films and TV productions, rendering strong support to healthy growth of SMEs in China's cultural industry.

According to industry insiders, China has over ten thousand companies working in the film and TV production industry, mostly small and medium-sized enterprises. Due to small size and poor financial position, they are facing periodic shortage of funds during the production of films and TV programs, hindering sustainable growth of good films and TV dramas. To address such problem, ICBC made an innovative approach to apply the supply chain finance in culture industry in order to meet the funding needs of these SMEs. Instead of using fixed assets as mortgage as in conventional industries, ICBC takes the broadcasting rights of films and TV dramas a tradable good according to the business models, financing needs and risk characteristics of the film and TV production companies, who use the account receivable collected from selling the broadcasting rights of their productions to downstream TV stations. Besides, ICBC has also developed new approaches for risk assessment and guarantee to offer credit facility to film and TV production companies. As the production materials of these companies "can be seen, no way to touch, cannot be mortgaged", ICBC focuses on risk assessment in terms of the company's management capability, business performance, work force and key executives. By evaluating the company's real core asset - "people", ICBC keeps the risk well under control.

According to the ICBC official, the culture industry, as represented by film and TV production, is an important part of modern service industry. ICBC has since 2008 given priority to modern service industry in credit support and introduced a financial service model and products to cater to various customers in this industry through constant innovations in products, services and processes. A featured product system has now been in place to meet the needs of most premier customers in modern service industry. In the next step, ICBC will further improve its service system and mechanism, build a professional marketing and sales team, and accelerate its pace in product and service innovation, in an effort to offer better financial services for the development of SMEs in the cultural industry.