China’s central bank announced on Tuesday an increase in the loan quota for the agricultural sector and small businesses in 12 provincial-level regions that have been ravaged by floods.
The loan quota will increase by 100 billion yuan (about $13.99 billion) for qualified enterprises in Chongqing, Fujian, Guangdong, Guangxi, Henan, Heilongjiang, Hunan, Jilin, Jiangxi, Liaoning, Shaanxi and Sichuan, according to the People’s Bank of China.
These are central bank loans to financial institutions at a certain interest rate, which are a monetary policy tool that the central bank can use to adjust the monetary base to achieve loan supply objectives.
Financial institutions should simplify procedures and speed up approval processes to ensure that the financing needs of affected companies are met, and they should help them resume production, the central bank stressed.
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