In the ever-evolving landscape of finance and its critical role in supporting the real economy, small and micro enterprises (SMEs) have emerged as a focal point of attention and innovationRecognizing the unique challenges these businesses face, various financial institutions are creatively adapting their lending modelsAs of the end of 2023, recent statistics from the financial regulatory authorities show that inclusive loans for SMEs have reached an impressive balance of 29.06 trillion yuan, reflecting a year-on-year growth of 23.27%. This marks a substantial improvement, outpacing the growth rate of other types of loans by 13.13 percentage points.

A striking recent example illustrates this trend: a downstream distributor of Jiangsu Yonggang Group successfully acquired a loan of 5 million yuan through the “Distributor E-Loan” service provided by CITIC Bank’s Suzhou branchThis case stands as a testament to the innovative approaches being employed to tackle the traditional financing hurdles faced by SMEs, particularly those with limited collateral and smaller operational scales.

Historically, the traditional loan application process posed significant barriers for small businesses, often requiring substantial collateral that many simply could not provideHowever, the aforementioned trading company associated with Yonggang Group successfully navigated this obstacle by leveraging key operational metrics such as the duration of their partnership and the volume of goods purchasedInstead of relying on conventional asset-based lending, they secured funding based purely on credit assessments derived from these metricsThis innovative approach not only reduced the application time frame but also lowered the barriers for SMEs that struggled under traditional lending criteria.

The successful implementation of this model by CITIC Bank’s Suzhou branch can be attributed to advanced financial technology and an innovative business paradigm

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The bank established a deep integration of information systems with the Yonggang Group, allowing for real-time data exchange between the two entitiesThis data connection enabled the bank to gain comprehensive insights into the transactions between the downstream distributors and the core enterprise, including details like historical cooperation records and the specifics of quantities purchasedUtilizing this substantial pool of authentic operational data, CITIC Bank was able to deploy big data analytics and develop a precise risk control model that thoroughly assessed the creditworthiness and repayment capabilities of their clientsThe outcome was a streamlined online approval process that maintained risk management without compromising on efficiency.

This breakthrough not only addresses the financing woes of small and medium-sized enterprises but also strengthens the collaborative ties between core enterprises and their downstream partnersTraditionally, these SMEs have had to engage in frantic searches for funding during cash flow crises, often returning empty-handed due to stringent lending criteria and complicated proceduresNow, with the “Distributor E-Loan” initiative, businesses can access necessary funds swiftly, alleviating urgent financial stress while simultaneously enhancing the relationship between core businesses and their distributorsThe stable flow of funds to downstream distributors significantly supports the stability of supply chains, ultimately enhancing the competitive capacity across the entire industry chain.

But how are banks and enterprises effectively exchanging crucial data? Since 2022, collaborations have formed between CITIC Bank’s Suzhou branch, Zhangjiagang branch, and Yonggang GroupBy creating a dedicated platform for financial services, these institutions are capable of integrating data interaction effectivelyAs part of their strategic direction for 2023, Yonggang Group has prioritized the enhancement of management capabilities among downstream SMEs and the establishment of an autonomous supply chain finance platform

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This involves digitizing essential data such as distributor lists, operational history, and transaction volumes to facilitate swift online funding processesZhangjiagang Branch's Vice President, Bao Feng, emphasized that this approach creates a win-win situation for banks, core enterprises, and downstream SMEs alike, forging a robust and mutually beneficial ecosystem.

Moreover, developmental initiatives are being undertaken by other banks to improve financial literacy and service access for SMEsFor example, since last year, Industrial Bank has implemented a financial envoy system designed to bridge the gap in financial support for high-quality economic developmentDuring their campaign dubbed “Inclusive Finance Promotion Month”, these envoys have actively disseminated knowledge about financial products and inclusive policies, facilitating better service and financial solutionsMore than 900 financial envoys have been appointed, making significant strides toward enhancing awareness and understanding among target audiences.

This proactive engagement has yielded results; for instance, the Jinan branch of Industrial Bank established its financial envoy last month, organizing business matching events specifically for technology-driven enterprisesThrough these initiatives, they introduced an extensive product system, spanning credit, collateral, and guarantee options tailored to the operational lifecycle of firmsConsequently, they forged financial cooperation agreements with over thirty enterprises.

By enhancing their outreach and the quality of inclusive finance services, Industrial Bank has observed a marked increase in SME loan balancesBy the end of March 2024, they reported over 550 billion yuan in inclusive small micro-business loans, an increase of 27 billion yuan since the start of the yearTheir focus on technology financing reached an impressive total of over 889.2 billion yuan, servicing more than 161,900 technology enterprises, while loans aimed at rural revitalization surpassed 700 billion yuan, assisting over 14,500 enterprises engaged in that mission.

The chairman of Industrial Bank, Lü Jiajin, commented on their commitment to supporting the development of private enterprises, viewing it as both a strategic responsibility and an opportunity for growth

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