International Finance Corporation (IFC), a member of the World
Bank Group, announced on Wednesday it had agreed to lend 45 million
U.S. dollars to China's first solely foreign-funded bank, the
Business Development Bank (BDB).
The money will help extend the bank's reach across the country
and expand its lending to small and medium enterprises (SMEs).
In a statement, the BDB said it expected to expand the coverage
and volume of its lending to smaller businesses significantly over
the next few years through a new SME lending model, without further
elaborating.
It disclosed the America-based United Commercial Bank (UCB) had
signed an agreement with its shareholders to acquire all its shares
and develop the bank into a model SME bank.
According to the BDB, the UCB would partner with IFC in its
program to broaden BDB's SME lending coverage and capacity.
"This project will have a strong demonstration effect, show that
SME financing is commercially viable and encourage other banks in
China to engage more actively in the sector," said Richard Ranken,
IFC director for East Asia and Pacific.
The Shanghai-headquartered BDB was established in 1992. It was
the first wholly foreign owned bank approved by the China Banking
Regulatory Commission. Its core business is to offer loans to SMEs
engaged in international business, most of which deal with
manufacturing and processing. In the 2007 fiscal year, IFC
committed 8.2 billion U.S. dollars and mobilized an additional 3.9
billion U.S. dollars through loan participation and structured
finance, such as syndicated loans for 299 investments in 69
developing countries.
(Xinhua News Agency December 6, 2007)
