China Further Implements Deferred Repayment of Principal and Interest for Small Business Loans

The People’s Bank of China and four other government departments issued a notice on further implementation of deferred repayment of principal and interest for loans to micro, small and medium-sized businesses on 1 June (Yin Fa No. 122 [2020]). The notice said the deferral will be applied to eligible loans under market-oriented, rules-based principles to strengthen the support policies for stabilising businesses and ensuring employment and alleviate the pressure on enterprises, especially micro, small and medium-sized businesses, to repay principal and interest on loans before the end of this year.

These policies apply to inclusive loans to micro and small businesses maturing between 1 June and 31 December 2020 (including loans to micro and small firms with a credit line of RMB10 million or less each and loans to individually-owned businesses and micro and small firms for business operations). The deferral will be offered “wherever possible”. For other micro, small and medium-sized enterprise loans and loans of large global industry-chain enterprises (foreign trade enterprises) and other enterprises with special difficulties maturing before the end of 2020, the enterprises may negotiate with banking financial institutions on deferring payment of principal and interest of their own accord.

Source: People’s Bank of China