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Ask AI · How to Break Through the New Lending Ideas for Bank Financing Difficulties for Private Enterprises?

In a private enterprise park in Mawei District, Fuzhou City, Fujian Province, an old banyan tree is lush with branches and leaves. Under the tree, on a massive stone, the four characters “Electrify the Nation” are bold and eye-catching, witnessing the perseverance of a generation of manufacturing people for long-term effort.

Wande Electric, established in Fuzhou in 2001, has focused on one thing for more than twenty years—making good electric motors. With a 83.6k-square-meter industrial park, over 300 employees, and products exported to more than 80 countries and regions, these achievements are not only the result of long-term technological investment but also rely on the “steady stream” support of finance.

General Manager Xu Zhenfei frankly stated that from expanding production to “going abroad” and then to increasing high-end R&D, funds have always been an unavoidable variable. In 2014, the Export-Import Bank of China’s Fujian Branch established an inseparable relationship with Wande Electric. Since then, for 12 consecutive years, the bank has provided comprehensive financial services of “financing + financial intelligence” to support the company’s international sales expansion.

Such stories are not unique. The “14th Five-Year” Plan outline proposes to develop and strengthen the private economy. Currently, many private enterprises are entering a new stage of “technology-intensive + capital-intensive.” When market uncertainties intertwine and overlap, enterprises generally face a key question: how to maintain innovation investment while stabilizing the basic operations.

Fujian, known for its “Only those who dare to fight will win” spirit, has always been a hot land for private economic development. Following the industrial chain of Fujian Province southward, the Financial Times reporters recently visited Fuzhou, Putian, Quanzhou, and Xiamen to explore vivid practices of financial empowerment for high-quality development of the private economy.

Private Enterprise Re-lending Opens Up the “Sandwich Layer” Blockages

For a long time, medium-sized private enterprises have been in the “sandwich layer” of the financing market—difficult to enjoy the inclusive policies for micro and small enterprises, and lacking the ability to access diversified market-based financing like large enterprises. They often face problems such as insufficient financing supply, high financing costs, and mismatched loan terms and operational needs, becoming a “shortcoming” in financial services.

In January this year, the People’s Bank of China (PBOC) set up re-lending for private enterprises under the support for agriculture, support for small businesses, with a quota of 1 trillion yuan, guiding local legal financial institutions to focus more on key areas and strengthen support for private micro and small enterprises.

Xiamen Ming Sui Grain and Oil Trading Co., Ltd. (hereinafter “Ming Sui Grain and Oil”) is one of the first beneficiaries of this policy.

From 2023 to 2025, external geopolitical conflicts, adjustments in international trade tariffs, and domestic consumption structural transformation have added pressure to Ming Sui Grain and Oil, with a significant decline in import volume. “Those years were the ‘tough period’ for the company’s development,” recalled Chen Yan Jing, assistant general manager. Under multiple challenges, operational and financial pressures surged. “Markets are changing, demands are changing. If we can’t adjust in time and break through the bottleneck, the company may fall into stagnation.”

Faced with development difficulties, Ming Sui Grain and Oil actively planned a transformation, but at the initial stage, the biggest obstacle was the funding gap—the company’s original import trade financing limit could not meet the new domestic procurement needs, and cash flow pressure became more acute.

Just as Ming Sui Grain and Oil was struggling with the funding gap for transformation, Xiamen International Bank’s Xiamen Branch, after in-depth research on the company’s operations, development plans, and financing needs, innovatively launched the “Private Enterprise Re-lending + Supply Chain Cooperation Fund” service model. By fully utilizing the low-cost funds from PBOC’s re-lending for private enterprises, combined with local fiscal subsidy policies, the bank ultimately provided a one-year supply chain cooperation fund loan. After interest subsidies, the company’s actual financing cost was only 2%, injecting long-term momentum into its transformation and upgrading, and promoting the quality improvement of the upstream and downstream of the grain and food industry chain.

“Unlike before, we have broken the dependence on collateral and now rely more on comprehensive assessment of the company’s operating conditions, cash flow, and supply chain situation, providing more credit support,” said Su Yan, General Manager of the Corporate Finance Department at Xiamen Branch of Xiamen International Bank. The introduction of the private enterprise re-lending policy has “filled the service gap,” enabling financial institutions to more accurately support such medium-sized private enterprises.

Currently, the private enterprise re-lending policy is steadily advancing in Xiamen. Data shows that by the end of the first quarter of 2026, the PBOC Xiamen Branch had issued about 6.5 billion yuan of the first batch of private enterprise re-lending to three local legal financial institutions. Relying on the central bank’s low-cost funds, local financial institutions are increasing credit support for companies like Ming Sui Grain and Oil, helping them solve financing difficulties, accelerate transformation, and stabilize development in market changes.

Diversified Financial Tools Expand Financing Paths

Traditional credit “expansion” and the continuous development of diversified financial tools also play a key role in the development of the private economy.

As a leader in China’s flexible circuit board industry, Hongxin Electronics, listed on the Growth Enterprise Market, successfully issued Fujian’s first private medium- and long-term science and technology innovation bonds at the end of 2025. The 200 million yuan funds were led by Xiamen Bank and jointly underwritten by Zheshang Bank. The timely arrival of funds gave the company enough confidence to advance its “full-stack computing power operation service provider” strategy.

“Science and technology innovation bonds broaden the company’s funding channels,” said Zhou Jiangbo, CFO of Hongxin Electronics. “Now, when promoting new directions like computing power, we are more at ease.”

“Bond financing with longer terms and more controllable costs opens a new financing path for private tech enterprises,” said Zeng Kaisong, Assistant General Manager of the Investment Banking Department at Xiamen Bank. This bond issuance is a practical example of the Xiamen Branch of PBOC guiding funds into the private tech innovation sector through the creation of “bond issuance guidelines,” encouraging the bond market to direct liquidity toward private tech innovation.

It is learned that in recent years, the PBOC Fujian Branch has guided financial institutions to provide one-on-one financing counseling services for enterprises, actively broadening bond financing channels for private enterprises in Fujian. This year alone, it has supported two private enterprises, Heng An International and CATL, in issuing science and technology innovation bonds in the interbank bond market, raising 13 billion yuan.

Enterprise needs are diverse and detailed, and financial management departments continue to promote more varied and precise financial supply to better match the development needs of the real economy.

At Wantai Hardware Co., Ltd. in Putian, a batch of display stands is ready for export. The company has increased R&D efforts, improved product added value, and actively expanded international markets. However, as business scale grew, operational risks also emerged. “The most direct issue is receivables,” said Vice General Manager Lin Chenqing. Some partners have long payment cycles or even delayed payments. “When accounts receivable pile up, it affects procurement, production, and other links.”

A turning point came in 2024. At that time, China Pacific Property & Casualty Insurance Putian Branch recommended domestic trade credit insurance to Wantai Hardware, with a coverage of 24.3 million yuan, covering the risk of accounts receivable losses caused by buyer credit issues in domestic trade. This enhanced its ability to cope with market uncertainties. “Since then, I’ve felt much more at ease,” Lin Chenqing said. In August 2025, based on positive feedback, the company actively renewed the policy.

Inside the Wantai Hardware production workshop, workers are busy. Photo by Shi Jiatong, Financial Times

“Besides trade credit insurance, bill discounting also solved our urgent needs,” said Lin Chenqing. The company receives about 10 million yuan monthly in bank acceptance bills with a three-month term. If not discounted timely, the company must hold the bills until maturity for cashing. After learning of this difficulty, Postal Savings Bank of China’s Putian Chengxiang Branch proactively connected and handled bill discounting services. “The company can immediately recover cash, reducing the cash cycle from three months to one day, effectively solving the cash flow problem,” said Lin Yanjun, Deputy Branch Manager.

It is understood that in recent years, the PBOC Fujian Branch has promoted the optimization of bill market services for private micro and small enterprises, guiding financial institutions to use digital means to develop “bill pools,” “fast discounting,” “instant trust discount,” and other specialized services, improving efficiency and service experience in bill acceptance and discounting for private micro and small enterprises.

“Combining fiscal policies with financial tools” Jointly Solves Financing Difficulties

In 2025, Cangfei Composite Materials Co., Ltd. (hereinafter “Cangfei”) in Xiamen’s production workshop, high-precision molding equipment is operating in order, producing high-performance carbon fiber components.

As a leading domestic manufacturer of carbon fiber composites and lightweight structural parts, Cangfei’s carbon fiber wheel hubs rank among the top in the industry. However, during its rapid push for technological breakthroughs and capacity upgrades, large-scale equipment updates and R&D investments once posed significant financial pressure, becoming a bottleneck for expansion.

In response, in 2025, the Agricultural Bank of China’s Xiamen Branch used technology innovation and technical renovation re-lending policies, combined with Xiamen’s technological innovation fund policies, reducing the company’s actual financing rate to 1%, greatly lowering its capital costs.

“This low-cost funding allows us to focus entirely on core technology breakthroughs without financial worries,” said Wang Mengjun, Chairman of Cangfei. “Once the project is operational, we expect to add 5 million high-performance carbon fiber wheel hubs annually, with annual sales revenue increasing by over 900 million yuan.”

Cangfei’s experience exemplifies the “fiscal policy + financial tools” approach to solving financing pain points. Compared to support through a single financial instrument, the “fiscal + financial” combination leverages government credit to compensate for market risk pricing deficiencies, enabling both supply and demand sides to move in tandem.

Industry insiders believe that on the demand side, policies like fiscal interest subsidies and government-guided funds can stimulate enterprises’ willingness to transform and upgrade when endogenous motivation is insufficient. On the supply side, addressing common issues like collateral shortages and narrow financing channels, leveraging government credit can effectively mobilize financial resources and social capital to weaker links, supporting high-quality development of private enterprises.

Based on this logic, Fujian Province has continued to deepen fiscal and financial coordination, promoting a replicable support model across the province with notable results. For example, ongoing efforts include implementing special policy loans like “Science and Technology Loans,” “Technology Renovation Loans,” and “Specialized and Innovative Loans,” offering risk compensation or fiscal interest subsidies, combined with structural monetary policy tools; guiding financial institutions to utilize the “Jinfu Cloud” integrated government service platform to facilitate easier access to credit for more focused, creditworthy private enterprises; and establishing a 130-billion-yuan provincial government-guided fund matrix around key industries like “555X,” encouraging banks to provide supporting loans and integrated financial services for projects receiving fund investments.

Building on existing initiatives, Fujian’s fiscal and financial coordination mechanism will further upgrade and improve. A relevant person from the PBOC Fujian Branch told the Financial Times that the next step will be to strengthen coordination with fiscal and other departments, continuously improve the fiscal-financial linkage mechanism, and continue to leverage policies like private enterprise re-lending, technological innovation, and technical renovation re-lending. They will guide financial institutions to implement policies such as small and micro enterprise loan interest subsidies and private investment guarantee plans, releasing policy synergy benefits.

Making “Certainty” Tangible and Perceptible

The vitality of private enterprises is a prominent feature of Fujian’s economy.

In interviews, more than a dozen companies mentioned a key word—“certainty.” In an uncertain market environment, business operations and innovation inherently involve risks. The support from finance aims precisely to provide backing for these risks and increase certainty.

In recent years, to make the vitality of private enterprises more sustainable and resilient, the PBOC Fujian Branch has promoted multi-point efforts—from mechanisms, tools, to services—gradually weaving a dense financial support network for the private economy.

A convincing data set shows that by the end of 2025, the loan balance for private enterprises in Fujian reached 2.78 trillion yuan, a year-on-year increase of 4.24%, higher than the average growth rate of all loans; inclusive small micro loan interest rates dropped to 3.7%. The trajectory of increasing volume, expanding coverage, and lowering prices makes the financial support for private enterprises increasingly clear.

The key to whether financial institutions dare to lend and are willing to lend lies in mechanisms. To address the issues of “dare not lend” and “reluctant to lend,” the PBOC Fujian Branch launched 16 supporting measures from top-level design and established a regular assessment mechanism, incorporating private loan issuance, internal pricing incentives, and due diligence exemption into evaluations, both to clarify responsibilities and to dispel concerns. Additionally, through incentive evaluations and inclusion in local assessment indicators, support for the private economy has shifted from “advocacy” to “hard constraints.”

The impact on enterprises is more direct. Pilot services for first loans in Xiamen, Quanzhou, and other places have helped many micro and small enterprises cross the “from zero to one” threshold. Statistics show that over 80k enterprises have achieved their first loan. Meanwhile, targeted actions around county industrial chains have directed financial resources more precisely toward “local specialties” and key industrial links. Some regions are also trying to incorporate quality evaluation and credit data into credit approval criteria, alleviating the old problem of “lack of collateral.”

It is evident that Fujian’s exploration emphasizes “targeted solutions.” Providing expectations through institutional arrangements, supplementing with tools, and following up with services, the relationship between finance and the private economy is shifting from “whether to connect” to “how to better adapt.”

In Fujian, supporting the development of private enterprises is no longer the effort of a single institution or product but a systemic project of multi-party collaboration. Banks, insurance companies, and other institutions work in concert, with tools like first loans, renewal loans, and credit loans working together. A multi-layered, three-dimensional financial service network is taking shape.

Source: Financial Times

Reporters: Ma Ling, Shi Jiatong

Editor: Liu Nengjing