2012 NPC & CPPCC Sessions

Political Advisor Suggests Grassroots Financial System for Small and Micro-Enterprises

( 2012-March-13 13:34:33)

By staff reporter LI YUAN

Liu Kegu, member of the CPPCC and president of the China Micro-finance Institution Association (CMIA) said in a CPPCC press conference on current economic issues that small and micro-enterprises, individually-owned businesses and farmers make up China's micro-economic system, and that these groups should be served by special grassroots finance institutions. Liu said a multi-level financial system corresponding to a pluralistic economic system could better promote the development of China's real economy.

Liu suggested the establishment of small finance companies that provide service for small and micro-enterprises. He also pointed out that the authorities should customize financial products for this group. For example, many of these enterprises don't have real property to take out a mortgage.

Liu said a two-level supervision system should also be introduced. To serve the tens of millions of small enterprises and individually owned businesses as well as the hundreds of millions of farmers, tens of thousands of small, grassroots finance agencies should be established. To monitor them in an effective manner, a two-level supervision system is required – central government authorities should be responsible for large and medium-sized financial agencies and local supervisory organs should target small and micro-agencies, he said.

It is crucial that the state introduces more preferential policies to support small and micro-enterprises, which can promote employment nationwide, Liu noted. In this context, establishing a public service system to help small finance agencies deal with management issues is also desired.

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