The Chinese government has recently introduced financial policies to support small and micro-sized enterprises battered by the recent Covid outbreak. However, these companies are complaining that they still cannot access loans.

Mr. Lin is a business owner operating a restaurant in Guangxi province.

In an interview via a phone call with U.S.-based media, Lin said that his company had been running well in the past. But it was hit by the Covid epidemic and repeatedly closed down in the past two years. 

He noticed that the government had launched some credit policies to help relieve difficulties for small businesses. Lin tried to access the loans but found that the government’s bailout policies had not worked.

Lin took an example. He said that he was queuing up when he went to a bank to do business. Next, he saw an account manager on the phone who kept constantly offering loans.

Consumer loans are worth 80,000 to 100,000 yuan, and the bank provides loans to customers with better bank qualifications.

Lin said that the bank’s account manager made six phone calls, possibly to rich people. None of those customers wanted a loan because they had plenty of money.

Lin said he heard the man next to him speaking on the phone on another occasion. A bank was offering credit to the man, but he said he didn’t need any bank loans.

Some business owners complained that the relevant policies only saw that those who needed it did not get help.

In May, Chinese Premier Li Keqiang presided over two meetings of the State Council to help stabilize smaller businesses and self-employed households. Among the 33 measures, all mentioned relief measures for small, medium, and micro enterprises, also industrial and commercial enterprises.

This included the increase of 1.6 trillion yuan inclusive loans by large state-owned banks to medium, small and micro-sized enterprises this year. Accordingly, the banks should renew loans, extend and adjust repayment arrangements, and waive default interest for these businesses and self-employed households.

However, Lin said the banks lend money to the rich, not to the self-employed businesses at the bottom like his restaurant.

Because of the Covid epidemic, the households are in difficulty, and their credit card is overdue, so they are not supported by the government’s policies. Many private self-employed individuals can hardly get help.

Lin said that the bank officials could conspire with outsiders to provide usury loans. The state-owned corporations get low-interest and interest-free loans, and then they re-lend through their own micro-financial companies.

According to the restaurant owner, the more the Chinese government encourages lending, the more corruption and malpractices occur.

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