OREANDA-NEWS. March 29, 2013. With an aim to help micro enterprises access bank loans, during the last few years ICBC has lauched innovative financial products in line with their business characteristics. Micro-enterprises welcome "Small Convenient Loan" since its launch in August, 2011, a new ICBC credit loan that does not require collateral from borrowers to secure the loan. As of today, just in Guangdong, ICBC has disbursed RMB 12.6 billion of "Small Convenient Loan" to about 8,000 micro-enterprises, meaning around RMB 1.6 million to each micro-enterprise on average.

"Small Convenient Loan" is an ICBC credit loan designed for micro-enterprises. When compared to conventional loans to small business owners, a borrower of "Small Convenient Loan" does not need to produce guarantee. ICBC uses the borrower's qualification, repayment wish, performance of contract and net assets as the criteria to release the loan instead of the collateral/pledge provided. This means micro-enterprises with good business operation but lack of collateral/pledge can access bank loan. "Small Convenient Loan" is more efficient since there is no need to go over the procedures of collateral/pledge or guarantee. The loan can be approved within one banking day shortest. To micro-enterprises, "Small Convenient Loan" is more suitable for "small, frequent, urgent" working capital needed for smooth operation since for each borrower the loan is capped at RMB 2 million with tenure less than 7 months.

"Small Convenient Loan" was considered risky. Yet, the quality of these loans to micro enterprises remains good as of today, said an executive with ICBC. Clearly, this fully demonstrates the credibility of the micro enterprises, on top of this, the ICBC innovation in risk management is another inseparable factor. During the approval of "Small Convenient Loan" and management after lending, ICBC examines the creditability of micro enterprises in detail. Besides, ICBC checks each risk point by going through the business characteristics of micro corporate clients, their types of merchandizes, business model and operation flow. Through tailored control measures, ICBC not only effectively controls risks but also increase marketing efficiency significantly, a statement of economic of scale for a large bank to provide loan services to small-and-micro enterprises.

There is a 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 in Guangdong. Through the launch of innovative loan products by extending credit to this market, ICBC is playing an important role to promote the healthy growth of micro enterprises and local economy, and provide job opportunities as well.