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Latest data shows that the balance of loans allocated to Zhejiang-based small- and micro-sized enterprises was 3.08 trillion yuan ($486 billion) at the end of 2021, up 713.5 billion yuan from the year before.

The balance and addition were both the highest among all provincial-level regions.

Renewal of bank loans

To address financial difficulties faced by many small companies amid the COVID-19 pandemic, the Zhejiang Banking and Insurance Regulatory Administration has allowed certain law-abiding companies to renew their bank loans without having to repay the principal amount by the due date.

The balance of such renewed loans stood at 660.99 billion yuan. Loans were made to 561,000 enterprises.

Insurance mechanism

Twenty-eight Zhejiang-based insurance companies have opted to join a financing program in which they charge the insurant a premium while issuing them a letter of guarantee for cash deposits.

A Jiaxing-based new energy company had found it financially challenging to pay the 30-million-yuan cash deposit which was needed for its construction of a lithium ion battery plant last year. To solve this problem, it turned to the financing program.

"I couldn't believe that my company could obtain a 30-million-yuan letter of guarantee for the cash deposit right after paying a small premium of 180,000 yuan. Our financial strain has been substantially alleviated as a result," said the company's general manager.

"The application of the insurance mechanism in the field of cash deposits has not only relieved enterprises' liquidity issues but also saved their time and effort in handling the procedures," said an official from the Zhejiang Banking and Insurance Regulatory Administration.

Zhejiang enterprises obtained 273.18-billion-yuan cash deposits through the insurance mechanism last year, up 39 percent year-on-year.

Emergency bank loans

In 2021, Zhejiang authorities encouraged commercial banks to extend emergency loans by offering to share the risks involved.

Bank outlets in Zhejiang issued 62.87 billion yuan in emergency loans to 55,000 small- and medium-sized companies which hire nearly one million employees in total. All these loans were offered financing assurance by government-backed institutions.