Originally published: June 21, 2007
Source: CCTV.com
The World Bank (WB) announced that its executive directors have approved a loan of US$100Mln to support China's efforts to finance micro and small enterprises (MSEs). The project would expand credit flows to MSEs on a mass-market and commercially sustainable basis, said a WB statement.
The project consists of wholesale and retail operations. The China Development Bank (CDB) has been chosen as the wholesaler for the project and would lend to and arrange technical support for participating financial institutions at the retail level. Under the project, US$95Mln will be channeled by the CDB to financial institutions, with a maturity of up to ten years and grace period up to five years. The financial institutions will lend the funds to MSEs at commercial interest rates.
The other $US5Mln would fund specialized and comprehensive technical assistance to the CDB and financial institutions, to strengthen their institutional capacity and skills to effectively engage in MSE lending.
"MSEs have played an essential part in China's effort to build a harmonious society. The WB hopes the project would demonstrate to Chinese banks that lending to MSEs could be commercially sustainable so that MSEs could expand, creating jobs and income growth and reducing poverty." said David Dollar, WB country director for China.
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