OREANDA-NEWS. May 29, 2013. With regard to the longstanding issue of financing difficulty facing medium, small and micro enterprise, state-owned large banks, which usually focus on large enterprises and large projects, are not to be left behind and are one by one entering the SME lending market. Since its establishment, the Beijing Branch of China Development Bank (CDB), which "promotes SME development with development financing", has made cumulative SME loans of 160 billion yuan and supported about 600 SMEs.

"In accordance with normal bank lending risk prevention and control standards, there are usually many limitations in lending and especially first-time lending to medium, small and micro enterprises and especially medium, small and micro technology enterprises." Ma Dong, deputy general manager of Beijing Orient View Technology Company, said technology SMEs, which usually are composed of just men and computers, often have few fixed assets and little working capital, and they often have poor ability to guard against market risks, so it is very difficult for them to obtain bank loans.

Through loan packaging with other SMEs, Orient View received its first three-year loan of 3 million yuan from CDB Beijing Branch in 2005. With this model, CDB has joined hands with many medium, small and micro enterprises to overcome the hurdle of the first loan. Once this hurdle is overcome, it will be relatively easier for medium, small and micro enterprises to obtain more bank loans.

"SMEs have accumulated their credit with banks with loans of a few million yuan, and it is not easy." Wang Xizhang, executive director of Beijing Gingko Group, said his company's single-loan credit limit with CDB has increased from the initial 5 million yuan to tens of millions of yuan.

It is well known that private enterprises often rely on self-financing for rolling development. In the process of business development, the needs for funding will also increase, and profits are often insufficient to support funding requirements. As a private enterprise in the plant extracts industry, Gingko, which was established in 1995, has seen its registered capital increase from 2 million yuan to 100 million yuan, and its funding needs have also increased.

"Money is ammunition, and is the blood for the survival of SMEs," Wang said emotionally. In 2001 Gingko began a pilot project for national industrialization of modern Chinese medicine extraction, but the project had to be suspended in 2003 because it could not secure bank lending due to guarantee issues.

"But after four years we unexpectedly obtained a single loan of 30 million yuan from CDB," said Wang. It has been learned that after Gingko's project officially started production in 2010, the annual output at present is around 500 million yuan.

Compared with large enterprises' credit lines of billions and tens of billions of yuan, the average one million yuan in a single business loan is indeed quite small, but it is precisely those medium, small and micro enterprises in the initial and critical stages of entrepreneurship that are in the most need for funding support.

"Although some SMEs and especially technology enterprises are very weak now, they have good growth prospects. They will thrive if banks will lend them a helping hand," Chen Xu, general manager of the operations center of Ace Achieve Group, said. Ace Achieve is exactly an enterprise that has thrived after receiving "a helping hand". In 2004 the company obtained a loan of 20 million yuan from CDB and was successfully listed on Singapore's main board. The company has since carried out credit cooperation with CDB for many times.

"Later on, after seeing CDB lending to us, other commercial banks including the top four banks also began to lend to us." Chen said that, given the nature of CDB, its lending to the company has not only attracted investors' attention to the company but has also been a great help to enhancing the image of the enterprise and its products.

In fact, as a state-owned policy bank, CDB has done its best to offer medium, small and micro enterprises benefits and support on the premise of adhering to relevant regulations. Zhou Aizhen, deputy general manager of the operations center of Ace Achieve Group, still vividly remembered the seven adjustments in the bank deposit reserve requirement ratio. "At a time when banks were all raising lending rates, CDB consistently offered stable credit support."

"The problem of financing difficulty for small and micro enterprises is not just a simple issue of funding supply," said Zhao Qingming, a financial expert. There is a consensus in the industry that the banking industry's marketing to medium, small and micro enterprises represents a trend in the era of interest rate liberalization. How to deal with the changing needs of growing medium, small and micro enterprises is a key focal point in the banking industry's financial support for the development of medium, small and micro enterprises.