Notice on Further Intensifying Interest Subsidies for Entrepreneurial Guarantee Loans and Fully Supporting Entrepreneurship and Employment Among Key Groups

Finance and Treasury [2020] ]21 Number

Finance Departments (Bureaus) of all provinces, autonomous regions, municipalities directly under the central government, and cities under separate planning; Finance Bureau and Human Resources and Social Security Bureau of the Xinjiang Production and Construction Corps; Shanghai Headquarters of the People's Bank of China, its branches, operational management departments, central branches in provincial capital (or capital) cities, and central branches in vice-provincial-level cities:

　　The current COVID-19 pandemic has had a certain impact on employment and entrepreneurship. To thoroughly implement the important speech delivered by General Secretary Xi Jinping at the meeting on coordinating the prevention and control of COVID-19 with economic and social development, comprehensively strengthen measures to stabilize employment, better leverage the guiding role of subsidized interest rates for entrepreneurial guarantee loans, enhance financial support, and fully support the resumption of work and production as well as entrepreneurship and employment, thereby promoting the orderly and stable development of the economy and society, we hereby issue the following notice:

　　 1. Expand the coverage范围

　　(1) Increase the support group. From the date of issuance of this notice until 2020 December of the year For loans newly disbursed on or before the 31st of the month, the following groups should be included within the scope of support: First, individual business operators in industries such as wholesale and retail, accommodation and catering, logistics and transportation, and cultural tourism—sectors that have been particularly hard hit by the pandemic and have temporarily lost their sources of income; second, individuals who have taken out loans specifically to purchase vehicles for rental operations; third, full-time drivers who have taken out loans to buy vehicles and joined online ride-hailing platforms (provided that the platform can supply supporting documents, such as the “dual certificates” proving the driver’s full-time status); fourth, taxi and online ride-hailing companies or their subsidiaries that meet the eligibility criteria; fifth, individuals who have already benefited from the interest-subsidy policy for entrepreneurship guarantee loans and have repaid their loans on time, but who are experiencing operational difficulties during the pandemic, may reapply for entrepreneurship guarantee loans.

　　(2) Lower the application threshold. The proportion of newly hired employees meeting the eligibility criteria for entrepreneurial guarantee loans relative to the enterprise’s existing number of employees shall be reduced from 20%. Decrease to 15% The proportion of enterprises with more than 100 employees has dropped to 8%.

　　 II. Appropriately increase the credit limit

　　The maximum loan amount for entrepreneurial guarantee loans available to eligible individuals is 15. Increase from 10,000 yuan to 20. Ten thousand yuan. For individual borrowers who meet the eligibility criteria and are starting a business in partnership, the loan amount may be appropriately increased based on the number of partners involved, with the maximum increase not exceeding 10% of the total loan amount eligible for individual borrowers.

　　 III. Allow reasonable extensions

　　For entrepreneurial guarantee loans to small and micro enterprises and individuals (including individual business households, the same applies hereinafter) experiencing temporary liquidity difficulties, The extension can be granted, with the maximum extension period up to 2020. June of the year On the 30th of the month, during the extension period, the fiscal authorities will provide normal interest subsidies. For individual entrepreneurial guarantee loans that have already been issued, if the borrower contracts COVID-19, the extension period shall, in principle, not exceed one year.

　　 4. Lower interest rates

　　The interest rates for newly issued entrepreneurship guarantee loans by financial institutions should be appropriately reduced. The specific standard is as follows: For poverty-stricken areas (including key counties designated for national poverty alleviation and development efforts, and the 14 nationwide... Loan interest rates for concentrated, contiguous areas with particularly difficult conditions The upper limit shall not exceed LPR + 300 basis points. The interest rate will be reduced to LPR plus 250 basis points. For the central and western regions, the cap will be lowered from no more than LPR plus 200 basis points to LPR plus 150 basis points; for the eastern region, the cap will be lowered from no more than LPR plus 100 basis points to no more than LPR plus 50 basis points. The specific loan interest rate will be determined through negotiation between the handling bank and the borrower and the borrowing enterprise, taking into account factors such as the borrower’s and the borrowing enterprise’s business conditions and creditworthiness. Loans that have already been disbursed or for which contracts have already been signed but not yet disbursed prior to the date of issuance of this notice will continue to be governed by the original regulations.

　　 V. Fairly Share the Interest

　　Since 2021 Starting January 1 of the year, for newly issued entrepreneurial guarantee loans to individuals and micro and small enterprises, the borrower and the borrowing enterprise will bear the interest portion below LPR minus 150 basis points, while the remaining interest will be subsidized by the fiscal authorities.

　　 6. Simplify the approval procedures

　　Promote electronic approval processes and gradually implement fully online procedures. Human resources and social security departments (hereinafter referred to as HRSS departments) in various regions may expand channels for applying for entrepreneurship guarantee loans through recommendations from local communities, village committees, mass organizations, financial institutions, guarantee agencies, and other entities. Furthermore, they should promote the integration of entrepreneurship guarantee loan application, review, and disbursement functions onto social security cards. Gradually roll out “one-stop” services by consolidating the review of borrower eligibility by HRSS departments, due diligence by guarantee agencies, and pre-loan investigations by financial institutions into a single, integrated review process, thereby avoiding redundant submission of materials. In principle, the HRSS department’s eligibility review should be streamlined to within 7 days. Within one working day, the guarantee institution shall exercise due diligence. The survey is compressed into 3. Within working days, the processing time from loan application acceptance to disbursement by financial institutions should, in principle, be compressed to within 5 working days. For cases that genuinely require additional procedures such as counter-guarantees or mortgages, the timeframe may be appropriately extended. In cases where an application does not meet the eligibility criteria, the applicant shall be notified within 5 working days, with a clear explanation of the reasons. The applicant shall also be informed at once of any supplementary documents or procedures that need to be completed. Localities are encouraged to independently integrate the guarantee fund with the processing procedures of the handling financial institutions, thereby further enhancing service efficiency.

　　 7. Waiver of Counter-Guarantee Requirement

　　Starting from the date of issuance of this notice, newly issued 10 Individuals applying for entrepreneurship guarantee loans of RMB 10,000 or less, as well as entrepreneurial projects recommended by national demonstration bases for entrepreneurship incubation or credit communities (rural areas), entrepreneurs, entrepreneurial projects, and entrepreneurial enterprises that have received honorary titles at or above the prefectural-level city level, creditworthy small and micro enterprises, merchants, and farmers assessed and approved by financial institutions, and second-time entrepreneurs with stable and trustworthy operations—these specific groups are exempt from the requirement for counter-guarantees. Localities with appropriate conditions are encouraged to gradually reduce or waive the counter-guarantee requirements for other entrepreneurship guarantee loans.

　　 8. Enhance the effectiveness of the guarantee fund.

　　Relevant departments in various regions should simplify guarantee conditions and procedures, formulate measures for due diligence exemptions and incentive constraints for guarantee funds, and reasonably increase the compensation ratio and efficiency of guarantee funds. A mechanism should be implemented to link the leverage ratio of guarantee funds with the loan repayment rate—specifically, the repayment rate for entrepreneurial guarantee loans that matured in the previous year (the actual amount recovered from loans that matured and were due in the previous year divided by the total amount of such loans). Amount of loans due for recovery accumulated over the past year) Reach 90% Above this, this year the leverage ratio may be appropriately increased to up to 10 times the balance of the guarantee fund deposits.

　　 9. Encourage localities to step up their support efforts.

　　Localities may appropriately relax the eligibility criteria for borrowers of entrepreneurship guarantee loans and raise the upper limit of loan amounts. Any additional interest subsidy expenses arising from these measures shall be borne by local governments.

　　 X. Strengthen overall coordination and incentive and constraint mechanisms.

　　The finance, People’s Bank of China, and human resources and social security departments should refine their collaborative mechanisms, accelerate the establishment and improvement of a categorized statistical system for entrepreneurship guarantee loans, enhance information sharing among departments, and fully integrate data related to eligibility review, interest subsidies, and loan disbursement. The human resources and social security department is responsible for conducting eligibility reviews. Each guarantee fund operation and management agency and participating financial institution shall report quarterly to the local branches of the People’s Bank of China, as well as to the finance and human resources and social security departments, on the status of guarantee fund operations and the disbursement and use of entrepreneurship guarantee loans. Branches of the People’s Bank of China should strengthen external incentives and constraints, such as targeted reserve requirement ratio reductions for inclusive finance and the issuance of special financial bonds, to guide participating financial institutions in enhancing the quality and efficiency of their services. The finance department is responsible for managing the guarantee funds, fiscal interest subsidies, and reward and subsidy funds; it should clarify the sources of guarantee funds and the compensation mechanisms, intensify performance assessments and supervision, effectively leverage the incentive role of reward and subsidy funds, and ensure that interest subsidies and reward and subsidy funds are disbursed promptly and appropriately.

　　 11. Policy Coordination

　　Entrepreneurial guarantee loan contracts that were already in effect prior to the issuance of this notice shall continue to be executed in accordance with the original contract terms. For matters not explicitly specified in this notice, the provisions of the “Notice from the People’s Bank of China, the Ministry of Finance, and the Ministry of Human Resources and Social Security on Implementing Entrepreneurial Guarantee Loans to Support Entrepreneurship and Employment” shall remain applicable. (Yin Fa [2016] ]202 The implementation shall follow the original relevant provisions, including the “Notice of the Ministry of Finance, the Ministry of Human Resources and Social Security, and the People’s Bank of China on Further Strengthening Fiscal Interest Subsidies for Entrepreneurship Guarantee Loans” (Cai Jin [2018] No. 22) and the “Notice of the Ministry of Finance on Revising and Issuing the ‘Administrative Measures for Special Funds for the Development of Inclusive Finance’” (Cai Jin [2019] No. 96).

　　Ministry of Finance

　　Ministry of Human Resources and Social Security

　　People's Bank of China

　　2020 April of the year 15th of the month