It is reported that the Wenzhou crisis is affecting the country. "No one dares to put a punch on this side. I am afraid it will not be returned." On October 11, people in the shoe and clothing industry stated that the local urgency urgently "brakes" the sudden increase in the deposits of major banks.
According to the survey, lending institutions in hotspots such as Wenzhou, Shenzhen, and Guangzhou have all slowed down the pace of lending in the near term, but interest rates remain high, and the average annualized interest rate is generally around 30%.
“*** played an important role in the Wenzhou crisis, enough to arouse vigilance, and interest rate liberalization should be promoted as soon as possible.†said a middle-level person in a large state-owned company. Wu Qing, deputy director of the Banking Department of the Development Research Center of the State Council’s Institute of Finance, believes that the issue of private lending is more important to legitimize the "***" and expand the supply of funds in the market. Natural interest rates will fall.
CICC recently conducted a survey on Wenzhou private lending. At present, the average interest rate for Wenzhou's private credit is roughly 24%-25%, and private credit with interest rates of 50%-60% is not much. However, in the next few quarters, the default rate of SMEs will increase, especially at the end of the year, SMEs will usher in the peak of payroll and payable accounts.
“The main reasons for the sharp increase in private lending rates are the central bank’s credit limit controls and the off-balance sheet business supervision of the China Banking Regulatory Commission,†said analysts Mao Junhua and Luo Jing in a research report.
Where does the private lending fund come from? According to the survey of the People's Bank’s Wenzhou Center Branch, 30% came from local companies, 20% from local residents, 20% from foreign companies and residents, and 10% from banks. However, CICC believes that local and foreign corporate funds also come from banks, so it is estimated that about 30%-40% of private lending originates from banks.
The booming market in Shenzhen is similar. The general manager of a local security company introduced that the beginning of the year, with a monthly interest rate of 3 points, rose to 4-5 points, and the annual interest rate was also 50%-60%. A small number of institutional salesmen in Longgang said that the monthly interest plus management fees apply to the company for at least 40% per annum. According to public information provided by another guarantee company, its monthly interest rate on lending is as low as 1% and as high as 15%, which means that interest rates can be as high as 180% per annum.
According to the survey, lending institutions in hotspots such as Wenzhou, Shenzhen, and Guangzhou have all slowed down the pace of lending in the near term, but interest rates remain high, and the average annualized interest rate is generally around 30%.
“*** played an important role in the Wenzhou crisis, enough to arouse vigilance, and interest rate liberalization should be promoted as soon as possible.†said a middle-level person in a large state-owned company. Wu Qing, deputy director of the Banking Department of the Development Research Center of the State Council’s Institute of Finance, believes that the issue of private lending is more important to legitimize the "***" and expand the supply of funds in the market. Natural interest rates will fall.
CICC recently conducted a survey on Wenzhou private lending. At present, the average interest rate for Wenzhou's private credit is roughly 24%-25%, and private credit with interest rates of 50%-60% is not much. However, in the next few quarters, the default rate of SMEs will increase, especially at the end of the year, SMEs will usher in the peak of payroll and payable accounts.
“The main reasons for the sharp increase in private lending rates are the central bank’s credit limit controls and the off-balance sheet business supervision of the China Banking Regulatory Commission,†said analysts Mao Junhua and Luo Jing in a research report.
Where does the private lending fund come from? According to the survey of the People's Bank’s Wenzhou Center Branch, 30% came from local companies, 20% from local residents, 20% from foreign companies and residents, and 10% from banks. However, CICC believes that local and foreign corporate funds also come from banks, so it is estimated that about 30%-40% of private lending originates from banks.
The booming market in Shenzhen is similar. The general manager of a local security company introduced that the beginning of the year, with a monthly interest rate of 3 points, rose to 4-5 points, and the annual interest rate was also 50%-60%. A small number of institutional salesmen in Longgang said that the monthly interest plus management fees apply to the company for at least 40% per annum. According to public information provided by another guarantee company, its monthly interest rate on lending is as low as 1% and as high as 15%, which means that interest rates can be as high as 180% per annum.
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