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There have been a series of stories in the media detailing the trouble small enterprises have faced receiving loans in China.
There is likely some degree of truth to these anecdotes. Given the credit tightening policies pursued by the authorities, there are probably many deserving enterprises that have been turned away by the banks this year.
However, a look at the overall lending situation in China reveals something much different. Instead of being denied credit, small and medium enterprises are receiving loans at a much faster rate than their larger counterparts.
The latest PBoC Monetary Policy Report provides the data:
In the first half of the year, small enterprises received 865 billion rmb in new loans, a year-over-year increase of 26%.
Medium enterprises received 734 billion rmb in new loans, an increase of 9.2%.
Large enterprises received 1.45 trillion rmb in new loans, an increase of 10.8%.
Overall, the lending growth rate to small and medium enterprises was 7.4% greater than that for large enterprises.
The stock of loans to large enterprises is still quite large, but if these trends persist small and medium enterprises will make up ground very quickly.
Overall lending growth to businesses has remained steady, growing 13% since June 2010 (compared to 11% for the previous year).
Next time you read another report alleging that small and medium enterprises can't receive loans, keep in mind that the while there may be localized problems the national trend is actually the opposite.