Home / Business / News Tools: Save | Print | E-mail | Most Read | Comment
Small-sum loan business enters launch countdown
Adjust font size:

Pilot scheme details

Sources told the newspaper that during the pilot every county (or district) is only allowed one small-sum loan company. When considering regional economic particularities, four cities, including Wenzhou, Hangzhou, Jiaxing and Taizhou, were granted four extra quotas, and Yiwu was granted one extra quota.

The government also set strict restrictions for the promoters of small-sum loan companies. Sources said that the promoters will be chosen from local key private enterprises that have regular management, sound credit and excellent operations. Their net assets should be more than 50 million yuan, or 20 million yuan in less developed counties, and their asset liability ratio shall be no higher than 70%. Also, these promoters need to have realized profits for three consecutive years and the total profits should be more than 15 million yuan, or 6 million yuan in less developed counties.

Despite the tight limits, many companies in Zhejiang have their eye on the pilot scheme. Therefore, the government of Zhejiang raised the threshold for small-sum loan companies.

According to the regulations, the registered capital of limited liability small-sum loan companies should be no less than 50 million yuan, 20 million yuan in less developed counties, and if the company is limited by shares, its registered capital should be no less than 80 million yuan, 30 million yuan in less developed counties. During the pilot scheme, the registered capital should be no more than 200 million yuan, 100 million yuan in less developed counties, and companies that earnestly serve small firms and the agriculture industry will be allowed to expand capital and shares a year later.

The limits are even tighter in Wenzhou. Sources said that the small-sum loan companies in Leqing, Ruian, Lucheng, Ouhai and Longwan must have 200 billion yuan of registered capital and other counties (districts) in Wenzhou must have 100 billion yuan.

"It's because that there is too much private capital in Wenzhou," said a source. "There would be even more applicants if the local government didn't raise the threshold."

The registered capital of small-sum loan companies should be paid in monetary capital only and should be fully handed in by promoters or investors in one payment.

An analyst said that according to the regulations released by PBOC and CSRC in May, "the major sources of funds should come from at most two banking financial institutions." The analyst added that there will be more applicants if this restriction is lifted.

Moreover, the shares held by the main promoters of the company should not be more than 20 percent of the total shares and the shares held by a single natural person, legal person, other social organizations or affiliated parties other than the main promoters should not be less than 0.5 percent or more than 10 percent.

     1   2   3   4    

Tools: Save | Print | E-mail | Most Read
Pet Name
China Archives
Related >>
- Microcredit firms may debut in Zhejiang
- Financial support for SMEs pledged
Most Viewed >>
- Post-Olympic blues no real threat to economy
- August CPI growth may be the year's lowest
- China begins special export tariff on fertilizers
- China inflation set to ease further
- Grain output to exceed 510 m tons this year
- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?