Small banks take initiative with small companies

In another style, Baoshang Bank, which was set up in Inner Mongolia in 1998, mainly develops its micro-level customers one by one, Duan Nan, general manager of the Micro Finance Department at the bank's Baotao branch, said on the forum.

The bank has 1,239 SME loan officers and has extended 70.4 billion yuan in loans as of 2005 to May 2013 and has earned 6.17 million yuan in interest.

Duan said the bank earned zero profit in the first two years from its small and micro finance pursuits but things have improved and SME loans have taken a larger part within its entire loan structure.

The regional bank extended 11.74 billion yuan in loans in the year 2011 with SME loans accounting for 40 percent and extended 8.57 billion yuan in loans in 2012 with SME loans accounting for 52 percent, Duan said.

Duan also added that the bank estimates its newly-added loans this year may amount to 8.4 billion yuan and SME loans could total 58 percent.

Hu Lan, general manager of the Credit Center for Small Companies at Longjiang Bank said at the forum that her bank mainly develops its customers according to the life cycle of different companies.

Longjiang Bank is a provincial commercial bank located in Northeast China's Heilongjiang province that was established at the end of 2009.

The bank, which has 30 branches and operates only in Heilongjiang province, has 192 SME credit officers and has already issued 18 billion yuan in SME loans.

Hu said that during their start-up period, his bank provided easy loans to small and micro companies and encouraged them to learn how to work with banks. During this growth period, the bank issued cheap loans to these small companies.

So when these companies mature, they will have an adequate financial record and will be able to contribute to the bank that has accompanied their growth, Hu added.

The bank also follows a "3688" rule which means the bank operates 365 days a year from 8:00 am to 8:00 pm..

"This work-hour extension has facilitated a lot of small and micro companies and has differentiated this bank from other banks, which has helped us build a good reputation,"