The General Office of the State Council has recently released the Guiding Opinions on Effectively Giving Play to the Role of Government-backed Financing Guarantee Funds to Practically Support the Development of Small and Micro Firms and "Agriculture, Farmers and Rural Areas" (the "Opinions").
The Opinions lay out specific measures in four respects. The first is focusing on the main business of providing financing guarantees in support of small firms and the cause of agriculture. The second is practically reducing the overall financing costs borne by small and micro firms and for "agriculture, farmers and rural areas". The third is creating a mechanism featuring cooperation between banks and guarantee agencies, under which government-backed financing guarantee agencies and banking financial institutions will pursue joint participation and share risks to a reasonable extent. The fourth is strengthening cooperation and resource sharing and optimizing the regulatory assessment mechanism. Among others, the Opinions state that, all levels of government-backed financing guarantee and re-guarantee agencies shall take an initiative to divest the issuance of government bonds and the financing guarantee business of government-backed financing platforms, constantly enhance the business scale and weight of guarantees provided in support of small and micro firms and "agriculture, farmers and rural areas", and mainly support small and micro firms and subjects related to "agriculture, farmers and rural areas" that each provide a guarantee of CNY5 million or less. For the national financing guarantee fund, the re-guarantee business charge shall be generally not higher than that charged for or by the provincial guarantee or re-guarantee fund (agency), and cooperation agencies will be instructed to gradually cut the average guarantee fee rate to lower than 1%.