Shanghai Unveils Lending App to Make Finance More Inclusive for Cultural, Creative SMEs
Peng Xiaoling
DATE:  Aug 17 2018
/ SOURCE:  Yicai
Shanghai Unveils Lending App to Make Finance More Inclusive for Cultural, Creative SMEs Shanghai Unveils Lending App to Make Finance More Inclusive for Cultural, Creative SMEs

(Yicai Global) Aug. 17 -- Shanghai's municipal government has released a data platform linking cultural and creative companies with financial services providers in a bid to help smaller companies gain access to otherwise costly, hard-to-obtain capital.

Shanghai Jingwen Investment, an investment company affiliated with the city's publicity department, unveiled the Shanghai Wenchuang application yesterday. Jingwen built and will operate the platform.

The app's goal falls in line with the central government's plans to encourage lending to small companies, which it has been looking to aid by increasing liquidity. Beijing has been campaigning for the country to deleverage for years while retaining economic growth, but since trade tensions with the US started earlier this year, it has leant to expansion and eased up on its mission to reduce debts.

The central bank cut the reserve requirement ratio in June in order to boost lending to smaller firms and provide liquidity for debt-to-equity swaps, according to a Standard Chartered China report the same month. It held to an earlier forecast that the bank will cut the ratio by 3 percentage points by the end of next year to stabilize credit growth and reduce financing costs.

Asset-light cultural and creative firms will be able to access the service via its official WeChat account, where it can learn about various financial services available and dedicated to their type of business. The app also offers assistance with applications and outlines related policies.

Some 30 financial institutions, including banks, microlenders, guarantors, venture capital firms, insurers and leasing companies, are already offering services through the platform.  More than 1,200 companies looking to borrow signed up during a three-month trial period, with many of them securing funds.

Editor: James Boynton

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Keywords:   Inclusive Finance,SMEs,Wechat,Shanghai