The China Banking Regulatory Commission will soon release guidelines on lending to small businesses, the banking industry watchdog said in a statement yesterday on its website. The new guideline will encourage lending, and push forward product innovations and risk control improvements, according to the statement. Release of the long-awaited guidelines will enhance government support for the development of China's small- and medium-sized enterprises (SMEs), industry analysts said. However, "its impact is likely to be limited," as banks who are interested in doing such business are already doing so, Yi Xianrong, a financial expert with the Chinese Academy of Social Sciences, told China Daily yesterday. He said the most important thing was for banks to establish a risk-based pricing system now the central bank has removed the ceiling on interest rates.
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