OREANDA-NEWS. February 02, 2012. In recent years, ICBC takes cultural industry as one important breakthrough to push ahead economic transformation and upgrade, as well as own business restructuring. Priority has been given to provide greater financial support for the healthy and fast growth of cultural industry. ICBC's loan balance to cultural industry rose more than RMB 12 billion from the beginning of 2011 to over RMB 63 billion at the end of the year, providing loans to 3300+ companies engaged in this sector and leading other banks in China in terms of loan balance and new loans, reported the press-centre of ICBC.

Meanwhile, ICBC also focuses on small-and-medium cultural companies. Among the present customer base of cultural companies, 3200+ small-and-medium cultural companies represent nearly 97% of the total. The proportion of loans to small-and-medium cultural companies has accounted for 73% of total loans to companies in the cultural sector.

Working capital is a major bottleneck for cultural sector to grow. This is due to the lack of concentration in this sector, the smaller business scale of cultural companies and the "intangible" nature of cultural companies' core assets in the past. In view of this, ICBC seeks new approach and adopts a "uniquely tailored" service through innovative products, streamlined mechanism and improved services in line with the characteristics of the cultural industry. ICBC offers a unique suite of tailored finance products to align with the business features of different types of cultural companies, and better meets their needs of financial services under effective risk control.

An ICBC executive said, for creative cultural companies with predominant "light assets", ICBC analyzes their upstream and downstream companies to offer an innovative supply chain finance solution - a trade finance product that aligns with their business operation and addresses their bottleneck that it is difficult to access bank loans secured by own current assets. Take television production companies as an example. Many of them are companies with "light assets", yet their downstream TV stations play a pivotal role in the supply chain, having plenty of liquidity for reliable payments. Based on this, ICBC rolls out innovative "Film & TV Link" business model – sell account receivables collected from TV stations under account receivable factoring. Under the new solution, ICBC has provided loans for the filming of 30+ TV dramas including Borrow Gun, Black Fox.

A major issue of film production companies is their assets which "can be seen, no way to touch, no way to pledge". In view of this, ICBC adopts innovative approach to asset risk on the real core assets of creative cultural companies - management capability, professional work team. Different risk control options have been exercised. That included collective loan release, pledge of copyrights and joint guarantee by the person who actual controls. In the end, loans have been provided to Huayi Brothers Media Corporation for the production of four films - "Tangshan Earthquake", "Detective D", "The Sound of Wind", and "Tracing Shadow".

For cultural companies with stable cash flow, ICBC uses the model - "fixed asset to support loan + closed management on income account". The net cash flow generated from their ticketing income and other business activities are used as sources of loan repayment. After signing the regulatory agreement for the account, all ticketing income and other business income are pooled into an exclusive account to ensure closed management. So far, through this new option, ICBC has provided loans to Changzhou Dinosaur Park, Hunan Zhangjiajie, Dalian Laohutan Ocean Park and Hangzhou Xixi National Wetland Park.

Cultural companies are one target recipient of ICBC loans during the "Twelfth Five-Year" period, said an executive with ICBC. As planned, at least RMB 20 billion of new loans will be disbursed every year on average. Total loan outstanding will reach RMB 150 billion and above by the end of "Twelfth Five-Year" period. ICBC has set forth three strategies for supporting the cultural industry.

I. A strategy of looming large cultural market, support the restructuring, mergers and acquisitions of cultural companies. Help cultural companies improve its modern management by providing all-product financial services. II.

A strategy of driving the growth of key regions. Seek unique regional business model and unique services in line with the policies and plans of governments and cultural administrative departments. Drive the cultural companies in the region to move forward and enlarge business scale. Share experiences and matured business models nationwide.

III. A strategy to support small-and-medium enterprises. Through innovative financial products and services, push the development of different cultural clusters - creative cultural services, TV and film production, animated cartoon in the Industrial Park and Industrial Base where a great number of small-and-medium cultural companies located.