A survey shows that one third of funds raised by small and midsize enterprises in China come from irregular financing channels.
The sample survey is conducted by a research project group of the Central University of Finance and Economics on underground finance in 20 provinces of China.
According to the survey, the absolute scale of underground financing stood at
740.5-816.4 billion yuan (US$89.5-$98.6bn) in China in 2003, most of which was irregular financing for small and midsize enterprises.
The survey shows that the more the region is underdeveloped, the more the region relies on underground financing. Small and midsize enterprises in western China obtain 43.18 per cent of their funds from underground credit, the proportion is 39.8 per cent in the central part and 33.99 per cent in the eastern part.
