Financing to Boost Science and Technology Enterprises
In 2011, Shanghai municipal government promulgated the Implementation Opinions on Facilitating the Growth of Science and Technology Enterprises by Innovative Financial Services, focusing on assisting financial institutions to optimize the system of science and technology financial services, and exploring new and effective approaches to provide financial services to science and technology enterprises.
(ⅰ) Promoting the Establishment of Financial Institutions Specialized in Science and Technology
Commercial banks are encouraged to set up branches specialized in providing financial services to science and technology enterprises in Shanghai’s science and technology parks, such as Zhangjiang, Zizhu and Yangpu; to provide favorable conditions to such branches in terms of financial resources and human resources; and to optimize the loan interest rate and loan approval mechanisms. Shanghai has established 28 bank branches specialized in providing financial services to science and technology enterprises.
(ⅱ) Fostering and Implementing Credit Risk Compensation Policies
In 2012, the Shanghai municipal government promulgated the Interim Measures on Credit Risk Compensation for Medium and Small Science and Technology Enterprises in Shanghai, encouraging commercial banks to enhance their credit support through bad-debt loss sharing. In 2013, the Shanghai Municipal Office of Financial Service and the Shanghai Municipal Financial Bureau lowered the credit risk compensation threshold to 1.5%. In 2013, Shanghai released loans totaling 10.75 billion RMB in the pilot program for science and technology credit risk compensation, involving 1,169 borrowers.
(ⅲ) Instructing the Financial Institutions to Launch Innovations on Science and Technology Financial Products
The Shanghai municipal government has actively instructed commercial banks to provide credit products that pragmatically meet the needs of science and technology enterprises. Specifically, the products are to address aspects such as guarantees, approval mechanisms, repayment schedules and pricing. For example, the Zhangjiang Financial Services Model, launched by the Shanghai branch of the Bank of China, offers a credit product in line with the life cycle of operations in science and technology enterprises, and it established the Zhangjiang Green Channel of Financial Services. Under the system, approval procedures for loans won’t exceed five working days, provided the applications are in accordance with requirements.