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Banks' "Big Business, Small Business" Loan Troubles

2008/4/25 16:55:00 31

Banks' "Small Businesses" And "Small Businesses" Are Facing Difficulties In Their Loans.

Monetary tightening, RMB appreciation, export tax rebate rate decline, labor and raw material prices rise......

Since last year, multiple pressures have flocked to export oriented enterprises, especially small and medium-sized enterprises.

As a large proportion of small and medium-sized export enterprises in Jiangsu Province, what are the current situation of their small business operation and financing?

The results of the two surveys completed by the Jiangsu Banking Regulatory Commission are worrying.

The survey shows that the loan satisfaction of small businesses has fallen by season and the capital chain is tense since last year, and the rise in cost and the decline in tax rebates have eroded the profits of these small enterprises, and some of the labor intensive enterprises such as textile and clothing are even on the edge of the loss.

What is even more worrying is that if small businesses with high dependence on banks are trapped in a vicious circle of financing difficulties and declining profits, how can banks in their banks withdraw?

Loan satisfaction rate decreases quarterly.

In the environment of tight money and limited bank credit, the most worry is that banks should "protect big ones and abandon small ones".

However, the Jiangsu Banking Regulatory Commission's survey of 6 cities, 20 banks and 120 small businesses in Suzhou, Changzhou and Nantong showed that since the first quarter of last year, the loan satisfaction rate of small businesses has shown a downward trend.

The survey shows that in the one or two quarter of last year, 120 enterprises applied for approval loans of 1 billion 190 million yuan and 1 billion 740 million yuan, and the loan satisfaction rates were 92.53% and 91.51% respectively. However, with the implementation of tight monetary policy, the approved loans in three and fourth quarters were 1 billion 490 million yuan and 1 billion 550 million yuan respectively, but the loan satisfaction rate dropped to 83.87% and 80.23%.

In 1 and February this year, 120 survey enterprises met the loan satisfaction rate of 87.61%, which was higher than that of the second half of last year.

However, a person from the Jiangsu banking regulatory bureau said that the loan growth was the fastest in the beginning of the year, and that some banks in the second half of last year could only extend loans to some enterprises because of the loan size, so the satisfaction rate of 87.61% should be lower.

A questionnaire survey of 120 households shows that only 75.83% of small businesses think their capital needs are basically satisfied.

Another indicator reflecting the growth of loans is the "loan to household ratio growth rate". Since last year, the number of loans for small businesses has decreased rapidly, from 5.09% at the end of the first quarter of last year to 1.50% at the end of 2 this year.

At the end of last year, the balance of small business loans of Bank of China (5.21,0.43,9.00%, Changzhou) accounted for only 2.69% of the total loans. The credit squeeze was the main reason for the bank to withdraw from small business customers, according to the Jiangsu banking regulatory bureau.

Profits decline inevitable

The 6 consecutive increase in interest rates and the lack of floating interest rates in the use of loan resources by banks have resulted in a significant increase in borrowing costs for small businesses with weaker bargaining power.

According to the survey, 78.33% of the 120 small businesses have more than 10% of the benchmark interest rate. Among them, 38.33% of the enterprises that float 20% or more.

The continued appreciation of the renminbi has made it difficult for export oriented small businesses to operate.

In mid April, Yu Xuejun, director of the Jiangsu banking regulatory bureau, went to Wuxi and Suzhou to hold talks with more than 20 export enterprises. Some export enterprises reflected that if the US dollar quotations were not raised, the exchange losses would be aggravated and the profit space would be compressed. However, the increase in us dollar quotations resulted in the loss of orders. At present, some small businesses have only 50%~60% in operation rate, and some enterprises have lost money or even failed.

The decline or cancellation of the export tax rebate rate has the greatest impact on Jiangsu's clothing and footwear industries with strong export capability.

In addition, the higher cost of raw materials and higher wages of employees are also engulfing corporate profits.

Taizhou Jingjiang Yong Gu sedan company reflects that last November to February this year, steel prices rose nearly 2000 yuan per ton, and manual wages rose by 30%, resulting in a net decrease of 1 million 800 thousand yuan in operating cash flow from 1 to March.

Wuxi Huahong group said, "1/3 of the company's earnings are offset by rising costs."

Default risk increases

The loan satisfaction rate of small businesses is decreasing, and the proportion of loans in small business liabilities is also decreasing.

The proportion in the four quarter of 2007 was 41.88%, 37.17%, 27% and 30.37% respectively, and it has dropped to 27.70% at the end of this year.

However, the above Jiangsu Banking Regulatory Bureau believes that this proportion is still very high, and the questionnaire shows that 115 of the 120 small businesses think that when the demand for funds is preferred, bank loans will account for 95.83%.

The weakening of the profitability of small businesses and the decline of profits will bring a test to the stock loans of small businesses of banks.

These people believe that once an enterprise fails to withdraw from the market due to no profit or loss, it is very difficult for banks to retreat.

Yu Xuejun is very worried about the seriousness of the problem. He told our reporter that "if the macro-control policy does not change and maintain for another quarter, the bad loans of banks will probably rise."

On the 22 day of the Jiangsu banking regulatory bureau's first quarter supervision meeting, the army encouraged banks to lend more money to SMEs, so as to minimize the risk, because "if we do not support small and medium-sized enterprises now, when these enterprises collapse in large areas, there will be systemic risks in banking".