East China’s Jiangsu province has upgraded its exclusive credit loan package for foreign trade firms in a bid to strengthen financial support for the foreign trade industry with greater efforts and more practical measures to alleviate the funding pressure.
Jiangsu Nongaitian Co., Ltd is an enterprise engaged in the research, development, processing and export of agricultural and sideline products with an annual export value of about 30 million US dollars. Since the outbreak of the COVID-19 pandemic, the company has increased its overseas orders due to the surge in the demand for garlic in Southeast Asia.
The company, however, has suffered from the shortage of funds due to the impact of the pandemic on the national economy, interfering with its boost in production capacity.
The upgrade of the exclusive credit loan package for foreign trade firms has helped it to tide over difficulties by securing a 7-million-yuan loan from the local branch of the Bank of China.
The Provincial Department of Commerce and the Provincial Department of Finance set up a capital pool to stimulate financial leverage with financial funds and encourage banks to grant loans to small and medium-sized foreign trade enterprises.
In the meantime, Jiangsu has upgraded the exclusive credit loan package for foreign trade firms by requiring relevant banks and insurance institutions to further reduce the cost of financing for enterprises so as to better cope with the aftermaths of the pandemic.
The Bank of China's lending rate fell from 4.26% of the average interest rate in the previous five months to no more than 3.75%. The CITIC Jiangsu Branch reduced the insurance rates and related credit charges for small and micro enterprises by 30%.
The upgraded exclusive credit loan package for foreign trade firms are now able to meet the capital demand for small and micro foreign trade companies with annual export volume of 30 million US dollars. These firms account for 97% of the province’s foreign trade enterprises.
As of the end of May, the exclusive credit loan package for foreign trade firms had benefited 1155 companies with 6.8 billion yuan of loan issued.
53 more companies had benefited from the loan package with 844 million yuan of loan issued in the period between May 1st and June 20, indicating the increasing vitality of the foreign trade sector in Jiangsu.