New efforts help Chinese SMEs meet investment funds
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The China Association of Small and Medium-Sized Enterprises (SMEs) is scheduling a series of "speed dating" sessions in 14 cities this year to introduce SMEs to new financing sources, China Daily reported Monday.
A pilot event was held in Shiyan, known as China's motor city, in central China's Hubei province, in May. Contracts of nearly 1.8 billion yuan (about 257 million U.S. dollars) were signed in the city. Another pilot matchmaking event was held in northeast China's Jilin Province in August, the newspaper said.
Preliminary agreements for 2.4 billion yuan in investments were reached involving more than 100 SMEs and 20 funds in Jilin.
The difficulty of SME financing has been highlighted during the economic slowdown. In 2008, more than 700,000 SMEs went bankrupt, the newspaper said, citing Li Zibin, head of the Chinese Association of SME (CASME).
Li said equity financing can become a major resolution to the problem, given that SMEs usually don't have enough credit or guarantees to obtain bank loans.
Apart from money, attendees mentioned the advantage of value-added service by tying the knot with funds.
Zhang Yuanda, vice secretary-general of CASME, said the critical problem is with the SMEs themselves because irregular management and an unclear development direction often discouraged banks and funds from supporting them.
In August, a State Council executive meeting adopted a decision urging more active measures to help SMEs overcome financing difficulties to achieve sound, rapid development.
(Xinhua News Agency September 14, 2009)
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