Banks bolster tech firms with new services

Industrial Bank Co Ltd, a national joint-stock commercial bank based in Fuzhou, Fujian province, also launched a trial in Fujian for an evaluation system assessing sci-tech innovation companies on 17 parameters, including intellectual property rights, government incentives and subsidies, as well as collaboration between academia and industry partners.

Based on the evaluation system and the tax information of borrowers, Industrial Bank provided online lending services to early-stage tech companies. It partnered with government agencies, insurers and guarantee companies to establish a risk-sharing mechanism for these types of loans.

The bank explored securitization of intellectual property and the method of accepting IP as loan collateral through cooperation with IP administrations in various regions. It also combined lending with investment from external investment institutions to better help growth-stage tech companies.

China CITIC Bank Corp Ltd, a Beijing-based national joint-stock commercial lender, recently launched an online unsecured loan product－which does not require any type of collateral－for innovative tech companies. These loans are extended based on the creditworthiness of applicants. The maximum loan amount is 10 million yuan per borrower and the loan tenure is no longer than one year.

China CITIC Bank has also joined hands with other types of financial institutions in offering technologically advanced companies a series of products and services, such as loans, transaction banking, equity incentives, IPO-related services and refinancing through capital markets. In addition, it has launched multiple products for growth-stage tech companies.

The bank said it will take full advantage of the complete set of financial licenses owned by its parent company, CITIC Group, continue to focus on smaller early-stage sci-tech innovation companies, build a faster, better and more comprehensive system of financial services to promote innovation in science and technology, and strengthen targeted support for technologically advanced small businesses.

Agricultural Bank of China Ltd, another large State-owned commercial lender, vigorously improved its direct investment capacity in recent years to provide both direct and indirect financing to tech companies.

The Ningbo branch of ABC, ABCI Investment Suzhou Corp Ltd and JZ Capital jointly set up a 5 billion yuan fund in Ningbo, Zhejiang province, with a focus on supporting equity financing for technologically advanced small and medium-sized enterprises in the Yangtze River Delta region.

"China should encourage commercial banks to directly carry out systemic cooperation with private equity funds and stock exchanges. Subsidiaries of banks, like wealth management arms, can also participate in this kind of cooperation to form a more complete and more mature service system between banks and their subsidiaries. This will help satisfy financing needs of different types of technologically advanced SMEs at different stages of development," said Zeng Gang, deputy director-general of the National Institution for Finance and Development.

"With the establishment of the Beijing Stock Exchange, the challenge of further expanding the investment and loan linkage mechanism is certainly worth exploring," Zeng said.

ABC signed a strategic cooperation agreement with the BSE on Dec 10 to promote synergy in areas of client resources, comprehensive services, business innovation, technology finance and information resources, with the aim of helping technologically advanced companies to stand out from a crowd of businesses in capital markets.

As of Dec 28, ABC had established cooperation with more than 2,600 technologically advanced "little giant" enterprises and offered credit to over 1,200 "little giants". The outstanding balance of its loans in this regard was nearly 20 billion yuan.