Chinese microcredit firms lend 600bn yuan

Chinese microcredit companies reported 600 billion yuan (96.31 billion U.S. dollars) in outstanding loans by the end of last year, up 52 percent year on year, an association head said Tuesday. Liu Kegu, director of the China Microfinance Institution Association, said the lending growth rate for this year will be about 37 percentage points higher than that of corresponding bank lending in yuan. New lending in 2012 was equivalent to the amount lent by a medium-sized bank, Liu said at the association's annual meeting. China now has more than 6,000 microcredit companies that provide about 65,000 jobs, Liu said. When China approved the establishment of microcredit companies in 2005, the number of such companies was less than 10 before jumping to 1,000 in 2009 and 4,000 in 2011. "Prospects for microlenders are promising as a result of increasing urbanization and limited loan access for small businesses," economist Gu Shengzu said. Grassroots lenders largely target small businesses and low-income groups. They have become increasingly important in China as a key channel for private capital to enter the financial market.