OREANDA-NEWS. January 26, 2012. This year, ICBC will embark aggressive marketing in China on extending "Small Convenient Loan", credit loans to small and micro enterprises, in areas where a lot of small and micro enterprises located, reported the press-centre of ICBC. 

The aim is to offer easier access for small and micro enterprises to obtain bank loan and address their long-term issue of "difficult to get guarantee". Earlier in August, 2011, ICBC started the pilot in extending "Small Convenient Loan" to small and micro enterprises in Guangdong who warmly welcomed the new service. By end-2011, ICBC has disbursed RMB 3.78 billion of "Small Convenient Loan" to nearly 3,200 small and micro enterprises in Guangdong, meaning around RMB 1.2 million to each enterprise on average. The "Small Convenient Loan" of ICBC effectively addressed the funding gap of small and micro enterprises and fully supported them to upgrade or loom large.

An executive with ICBC said, the "Small Convenient Loan" is different from conventional loans to small and micro enterprises which must be secured under guarantee. Small and micro enterprises applying for "Small Convenient Loan" can use their own credibility and do not need to provide collateral or other guarantee. The "Small Convenient Loan" can be approved to eligible borrowers in 3 to 5 working days, up to RMB 2 million and a loan tenure of 7 months longest, very suitable for small and micro enterprises to obtain financing "in a short time, in a frequent and quick fashion". Besides, the "Small Convenient Loan" also saves their cost in producing collateral or guarantee and relieve their burden.

Mr. Dong, a LED manufacturer in Xiaolan Town of Guangdong's Zhongshan, knows all the benefits of "Small Convenient Loan". Before that, Mr. Dong was a trader of hardware and fixtures. He then dabbed into LED industry when this emerging sector starts to flourish in Xiaolan. His business soon grows big as more and more orders come in, putting the company into financial stress. However, it is difficult to get bank loan since he has no land or manufacturing plant for collateral. Very often he resorts to private lenders whenever there is a shortage of working capital, but the cost is high. Without giving much hope of getting the loan, he submitted an application to ICBC to apply for "Small Convenient Loan". On the next day, ICBC sent staff to visit his company and understand the production management and customer orders. "It's really out of my expectation that ICBC released a loan of RMB 2 million to my company account in just a few days to solve my urgent need. With the loan, I am more confident to go ahead", said Mr. Dong very happily.

An ICBC executive said, so far, there is no default on loans to small and micro enterprises which was viewed as a very risky business before. In one aspect this marks the trust and credibility of the small and micro enterprises. Another factor is ICBC's innovation in risk management. During the approval of "Small Convenient Loan" and the management after lending, ICBC links the loan risk with the special markets and industry clusters of the small and micro enterprises besides checking in every detail their credibility. Measures are drawn up to prevent and control risks at every point according to the business characteristics of small and micro enterprises, type of merchandize they trade, their business model and operation flow. As a result, ICBC not only controls risk effectively, but also improves marketing efficiency significantly, demonstrating the economic scale of a large bank to provide loans to small and micro enterprises.

Industry insiders said that the great number of private small and micro enterprises in China, especially the large assembly of micro enterprises active in the special markets and industry clusters, is a "blue sea" waiting for banks to touch. Through the launch of innovative loan product, ICBC uses small loans to open this market and extend the services to small and micro enterprises. Through innovative financial products and services, ICBC aims to use "small" pan to bake "big" cake, use "small" services to create "big" market.