China Tries To Persuade Loans To Small Businesses

The People’s Bank of China had used reserve ratio cuts in past years to spur broader economic growth.
Reserve ratio cuts were once one of the People’s Bank of China’s most potent moves to stimulate the economy.
Zhu Ning, a prominent economist at Tsinghua University, said that the central bank was trying to ease credit for the smallest-scale borrowers without setting off more wasteful lending.
The central bank said that it would reduce the reserve ratio by half a percentage point for banks that have at least 1.5 percent of their loans in inclusive finance.
Delaying the start of the rule this time gives banks time to increase their lending to small businesses so they can qualify for the new reserve ratios.

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