China’s microcredit companies have mushroomed in recent years as the government has encouraged their development in order to boost lending to small businesses.
The number of microcredit companies increased from less than 10 in 2005 to nearly 6,000 as of Friday, Jiao Jinpu, secretary of the China Microfinance Institution Association, said at a forum on Saturday.
Microcredit companies have issued nearly 150 billion yuan (23.83 billion U.S. dollars) in loans so far this year, and their outstanding loans exceeded 540 billion yuan, according to Jiao.
Microlending companies have become an important component of, and supplementary power in China’s credit market. They have also been important routes for private capital to enter the financial market.