Conscious of their crucial role in the development of a business, Chinese banks increase their innovative financial offerings to companies that depend on technology or are already advanced in this field. This is in line with the country’s ambitions for development excellence.
This is already happening as efforts in this direction are already intensifying. For example, a bank in its Jiangsu branch provided a loan of 154 million yuan ($24.22 million) to a major lithium mining company. It was intended for a new lithium battery project.
It must be said that these Chinese banks are keen on the technological project of the company requesting a loan. Finding their new project viable, the bank granted the lithium company a loan after evaluating the company’s capacity for innovation. It should be noted that the debtor was a public company specializing in the research, development and production of lithium batteries and battery management systems.
Inspired by this, many banks are extending bespoke services for tech companies. Another state-owned commercial lender has launched a bank-wide promotion for a system to assess the innovation capacity of technology companies. By adopting the new system, the bank is able to make a company’s level of technological development a key factor in the bank’s lending decisions.
This system helps small and medium-sized technology companies overcome the difficulties of obtaining bank loans solely through the analysis of their financial indicators. Additionally, it uses technology to narrow its search for tech companies to help.
To start, the bank had access to lists of more than 10 types of technology companies published by different ministries and to more than 16 million records of information on intellectual property rights.
As a result, its new system now covers 277,000 national high-tech and new technology enterprises. To automatically generate assessments of the innovation capacity of companies based on their intellectual property rights, the bank uses:
- big data
- Decision-making assisted by artificial intelligence (AI)
- Data visualization
- A series of quantitative indicators
For their part, technology customers can check the assessment results on desktop computers, the mobile application or via the bank’s social networks. For enterprises with strong innovation capabilities and good market potential, the bank will adopt various credit enhancement measures and give high priority to their loan applications.
There is more. A Beijing-based domestic commercial equity lender recently launched an online unsecured loan product, which does not require any type of collateral, for innovative tech companies. These loans are granted based on the credit worthiness of the applicants. The maximum loan amount is 10 million yuan ($1,577,287) per borrower and the loan term does not exceed one year.
Moreover, it has also partnered with other types of financial institutions to offer technologically advanced businesses a series of products and services. These include lending, transaction banking, equity incentives, IPO-related services, and refinancing through capital markets. Additionally, he has launched several products for growth-stage technology companies.
Indeed, reaching out to tech companies has become something of a trend for Chinese banks. This kind of support is welcome. This shows how frenetic activity is on the continent when it comes to technological advancement.
The results became evident. To date, China’s digital transformation is nothing short of being considered massive. For example, the country just saw its fifth 5G operator go full throttle this year. It should satisfy the masses in a few months.
It is a wonder. The world is witnessing how digital adoption can change lives. Not only did China launch its digital currency during the Beijing 2022 Winter Olympics, but innovation was in the spotlight with assistive technologies showing how far ICT can take us, as OpenGov Asia reports. .