China Merchants Bank will ensure that 40 percent of its new loans will go to small and medium-sized enterprises next year, the bank said yesterday.

The bank said it will make every effort to grow the SME loan business despite the global financial crisis.

"Small players are hard hit amid the impact from the global financial crisis and banks are more cautious about granting loans to them on concerns of risk exposure," the Shenzhen-based lender said. "However, after fully analyzing market conditions and government policies, our bank is sticking to its strategy to develop the SME sector as one of our key businesses."

In 2006, the bank targeted the SME loan business as potentially lucrative and has lent 500 billion yuan (US$73.2 billion) to the sector since then. The bank has more than 10,000 SMEs as clients. The outstanding value of SME loans has grown 57 percent since 2006.

"Sticking to the SME strategy doesn't mean we care little about risk control," the bank said. It will rate SMEs and refuse those which diversify blindly and have very high liabilities.

In June, the bank set up a small enterprise center in Suzhou in Jiangsu Province which targets small enterprises with an annual revenue of less than 5 million yuan in the Yangtze River Delta and the Pearl River Delta.

(Shanghai Daily November 28, 2008)