China’s Big Bet on Small Business: New Policies to Fast-Track SME Financing, New Third Board & Beijing Stock Exchange Listings

Get ready, because China is making significant moves to turbocharge its small and micro enterprise financing landscape, opening up new avenues for growth and investment.

Eight major government departments have just rolled out a comprehensive set of measures designed to make it easier for small and micro enterprises (SMEs) – including the crucial gètǐ gōngshānghù (个体工商户 individual businesses/self-employed) – to get the funding they need.

This isn’t just about loans; it’s a multi-faceted strategy eyeing everything from equity financing and stock market listings on the New Third Board (Xīn Sān Bǎn 新三板) and Beijing Stock Exchange (Běi Jiāo Suǒ 北交所) to leveraging venture capital and refining risk management.

For investors, founders, techies, and marketers watching the Chinese tech scene, these changes are a big deal. Let’s break down what’s happening.

The Official Lowdown: Who’s Driving This SME Financing Overhaul?

This initiative isn’t a solo act. It’s a coordinated effort from some of China’s most powerful regulatory and economic bodies.

The “Several Measures to Support Financing for Small and Micro Enterprises” comes jointly from:

• The National Financial Regulatory Administration (Guójiā Jīnróng Jiāndū Guǎnlǐ Zǒngjú 国家金融监督管理总局)
• The People’s Bank of China (Zhōngguó Rénmín Yínháng 中国人民银行)
• The China Securities Regulatory Commission (Zhōngguó Zhèngjiān Huì 中国证监会)
• The National Development and Reform Commission (Guójiā Fāzhǎn Gǎigé Wěi 国家发展改革委)
• The Ministry of Industry and Information Technology (Gōngyè Né Xìnxī Huà Bù 工业信息化部)
• The Ministry of Finance (Cáizhèng Bù 财政部)
• The State Taxation Administration (Shuìwù Zǒngjú 税务总局)
• The State Administration for Market Regulation (Shìchǎng Jiānguǎn Zǒngjú 市场监管总局)

(Notice dated May 19, 2025)

This collective firepower underscores the strategic importance of SMEs to China’s economic blueprint, aligning with directives from top-level meetings like the Central Financial Work Conference (Zhōngyāng Jīnróng Gōngzuò Huìyì 中央金融工作会议) and the Central Economic Work Conference (Zhōngyāng Jīngjì Gōngzuò Huìyì 中央经济工作会议).

The goal? To make significant strides in inclusive finance (pǔ huì jīnróng 普惠金融) and tackle the persistent financing hurdles faced by these vital economic players.

• National Financial Regulatory Administration
• People’s Bank of China
• China Securities Regulatory Commission
• National Development and Reform Commission
• Ministry of Industry and Information Technology
• Ministry of Finance
• State Taxation Administration
• State Administration for Market Regulation

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Why Small and Micro Enterprises (xiǎo wēi qǐyè 小微企业) are a Top Priority

Let’s be clear: small and micro enterprises (xiǎo wēi qǐyè 小微企业) are not just a footnote in China’s economy.

They are acknowledged as:

• Crucial components of the national economy and social development.
• A vital support system for stable employment and improving people’s livelihoods.

While previous efforts have seen increased loan volumes, broader coverage, and reduced costs for SME financing, challenges remain.

These new measures aim to build on past successes and implement the “Implementation Opinions of the State Council on Promoting High-Quality Development of Inclusive Finance” (Guófā [2023] No. 15) by optimizing the synergy of regulatory, monetary, fiscal, tax, and industrial policies.

The focus is on practical, effective solutions to solve financing difficulties for small and micro enterprises, explicitly including individual businesses/self-employed (gètǐ gōngshānghù 个体工商户).

The Game Plan: Key Measures to Revolutionize SME Financing

Here’s a deep dive into the strategic pillars designed to support small and micro enterprises:

I. Pumping Up the Volume: Increasing Financing Supply for SMEs

More capital, better access. That’s the mantra here.

(一) Strengthening SME Financing Coordination Nationally & Locally

The National Financial Regulatory Administration and the National Development and Reform Commission are leading the charge to supercharge the coordination mechanism for SME financing.

This means:

• Improving work mechanisms at provincial, city, and county levels.
• Launching “visits to thousands of enterprises and ten thousand households” – a massive outreach to understand SME operational status and financing needs firsthand. (Insight: This signals a commitment to data-driven policy and direct engagement.)
• Recommending eligible enterprises directly to banks, ensuring credit funds are fast, convenient, and have appropriate interest rates.
• Beyond matchmaking, a focus on solving actual operational difficulties to stimulate SME vitality.
• Prioritizing resources for key sectors like foreign trade, private enterprises, technology, and consumption.

(二) Sharpening Regulatory Guidance for SME Loans

It’s about smarter, not just more, lending.

• Implementing detailed differentiated regulatory policies for SME loans, balancing credit extension, structural optimization, and risk prevention.
• Guiding large commercial banks to continue being the main force serving the real economy.
• Directing small and medium-sized banks to focus on their core business and leverage local advantages to support SME financing actively.
• For compliant SMEs with genuine needs and good credit, expect increased financing matchmaking and credit resource allocation.
• A push for more first loans, credit loans, medium- and long-term loans, corporate entity loans, and private enterprise loans to optimize the SME loan structure.

(三) Smart Money: Leveraging Structural Monetary Policies

The People’s Bank of China (Zhōngguó Rénmín Yínháng 中国人民银行) will use tools like re-lending for agriculture and small businesses to steer financial institutions towards expanding credit support for SMEs.

(Insight: This demonstrates targeted monetary easing to ensure liquidity reaches SMEs.)

(四) Breathing Room: Extending Loans Without Principal Repayment

Cash flow is king for SMEs.

• Banks are guided to implement the “Notice on Doing a Good Job in Loan Renewal and Improving Financial Services for Small and Micro Enterprises” (Jīn Guī [2024] No. 13).
• This means optimizing loan renewal products, smoothing handling channels, and expanding policy coverage.
• Encouraging banks to use methods like loan renewal without principal repayment, extensions, and adjusted repayment arrangements to ease capital turnover difficulties.

(五) Fueling Ambition: Championing Equity Financing & Stock Market Pathways

This is a potential game-changer for high-growth SMEs.

The government is actively:

• Supporting eligible small and micro enterprises to list on the New Third Board (Xīn Sān Bǎn 新三板).
• Facilitating their upgrade to the Beijing Stock Exchange (Běi Jiāo Suǒ 北交所) after standardized growth. (Insight: This creates a clearer, state-backed pathway for SMEs to access public markets.)
• Guiding more social capital to flow into innovative small and medium-sized enterprises, fostering industry-wide and supply chain growth.
• Empowering local financial regulators to enhance regional equity markets’ capabilities in standardized cultivation and equity financing services for SMEs.
• Backing venture capital funds (chuàng tóu jījīn 创投基金) to increase equity investments in startup and growth-stage SMEs.
• Exploring reforms for government investment funds, such as extending evaluation cycles and increasing risk tolerance, to encourage investing early and small.

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II. Slashing Costs: Reducing Comprehensive Financing Burdens

Making funding more affordable is key.

(六) Fair Play in Loan Pricing

Banks are to reasonably set SME loan interest rates based on the Loan Prime Rate (LPR 贷款市场报价利率), their funding costs, and SME customer characteristics, ensuring policy benefits are passed on.

(七) Cutting Down on Extra Fees (fù jiā fèiyòng 附加费用)

No more hidden costs.

• Banks must optimize pricing for SME financing services, eliminate illegal fees, and strictly follow “seven prohibitions” regulations.
• Standardizing cooperation with third parties.
• Improving risk management tech to avoid unnecessary additional credit enhancement demands that push up costs.
• A crackdown on illegal intermediaries in the financial sector is planned.
• Piloting explicit statements of comprehensive financing costs for enterprise loans. (Insight: Transparency is being pushed hard.)

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III. Speeding Things Up: Improving Financing Efficiency

Time is money, especially for SMEs.

(八) Boosting Online Loan Businesses Safely

Leveraging tech for faster, smarter lending.

• Guiding banks to use technology to refine credit approval and risk management models for independent loan assessment.
• Enhanced monitoring of fraud risk, with timely updates to anti-fraud models and tech.
• Strengthening multi-dimensional data cross-verification for better early warning.
• For online automated loan approvals, a manual review mechanism with reasonable triggers is required.

(九) Streamlining Offline Loan Processing

Efficiency isn’t just digital.

• Banks to simplify application material lists (qīngdān 清单), optimize approval processes, and boost efficiency.
• Large and medium-sized commercial banks to delegate more credit approval authority to branches and cut down offline processing times.

IV. Pinpoint Accuracy: Enhancing Precision of Financial Support

Targeted support where it’s needed most.

(十) Bolstering Financial Support for Key Enterprise Areas

Focusing on high-potential and specialized SMEs.

• Utilizing results from the stepwise cultivation of high-quality SMEs and hierarchical classification of individual businesses (gètǐ gōngshānghù 个体工商户).
• Banks to actively engage with Specialized, Refined, Unique, and Innovative (Zhuān Jīng Tè Xīn 专精特新) SMEs, tech and innovative SMEs, and “famous, excellent, new” individual businesses.
• Serving SMEs in characteristic industrial clusters and China-foreign SME cooperation zones with targeted financial support.
• Exploring the use of evaluation results for “Zhuān Jīng Tè Xīn” SMEs to assist their financing.
• Leveraging the “national one network” of the China Small and Medium Enterprise Service Platform and organizing the “One Month, One Chain” National SME Financing Promotion Activity.
• Increasing financial support for SMEs in new foreign trade formats like cross-border e-commerce (kuàjìng diànshāng 跨境电商).
• Encouraging the “first processing account” expansion for cross-border Renminbi (Rénmínbì 人民币) to meet SME foreign trade hedging needs.

(十一) Updating SME Classification Standards (Zhōng Xiǎo Qǐyè Huà Xíng Biāozhǔn 中小企业划型标准)

Using fresh data for better targeting.

The Ministry of Industry and Information Technology will revise the Small and Medium-sized Enterprise Classification Standards based on data from the Fifth National Economic Census. (Insight: This ensures policies are based on the most current understanding of the SME landscape.)

V. Keeping Score: Supervising Policy Implementation

Making sure these measures actually work.

(十二) Regular Regulatory Check-ups

Ongoing evaluations of bank services for SMEs to incentivize a long-term commitment to SME finance – being “brave to lend, willing to lend, able to lend, and skilled in lending.”

(十三) Due Diligence Exemptions Done Right

Protecting diligent loan officers.

Banks to implement the “Notice on Inclusive Credit Due Diligence Exemption Work” (Jīn Guī [2024] No. 11), refining standards and combining them with non-performing loan tolerance.

(十四) Fine-tuning the Inclusive Finance Department Mechanism

Ensuring banks are structured for SME success.

• Large and medium-sized banks to optimize line management and departmental setups at first-level (yī jí 一级) and second-level (èr jí 二级) branches.
• Performance assessment weight for inclusive finance business must be at least 10%.
• Preferential internal fund transfer pricing (FTP) of not less than 50BP for inclusive SME loans.

VI. Managing the Downside: Strengthening Risk Management for SME Loans

Balancing support with prudence.

(十五) Revising Risk Classification for SME Loans

Formulating differentiated risk classification standards for SME loans based on their unique characteristics, simplifying the method.

(十六) Speedier Non-Performing Loan (NPL) Disposal

Freeing up resources for new lending.

• Banks to allocate write-off space towards SME loans.
• Researching and optimizing write-off policies for SME loans.
• Piloting programs to increase the ceiling for list-based write-offs of credit loans for small business owners and individual businesses (gètǐ gōngshānghù 个体工商户).

VII. Building a Safety Net: Improving Policy Guarantees for SME Financing

Creating a more supportive ecosystem.

(十七) Optimizing Risk Sharing and Compensation

Strengthening the government-backed financing guarantee system (zhèngfǔ xìng róngzī dānbǎo tǐxì 政府性融资担保体系).

• Implementing the “Administrative Measures for the Development of Government-backed Financing Guarantees” (Cái Jīn [2025] No. 11).
• Encouraging eligible localities (while preventing new hidden debts) to use risk compensation, guarantee fee subsidies, capital replenishment, etc., to guide guarantee institutions to increase support for SMEs, expand coverage, and reduce fees.

(十八) Leveraging Fiscal and Tax Support

Using tax breaks and fiscal policies effectively.

• Implementing tax preferential policies (yōuhuì zhèngcè 优惠政策) like VAT exemption on interest income from small loans to SMEs and individual businesses.
• Using special funds for inclusive finance development to boost SME financing.

(十九) Deeper Credit Info Sharing and Application (Xin Yi Dai 信易贷)

Better data, better lending decisions.

• Consolidating achievements of the “Xin Yi Dai (信易贷 – easy credit based on trust)” work.
• Expanding credit information collection and sharing via the Financing Credit Service Platform (róngzī xìnyòng fúwù píngtái 融资信用服务平台).
• Strengthening data sharing from the National Financial Credit Information Database (Guójiā Jīnróng Xìnyòng Xìnxī Jīchǔ Shùjùkù 国家金融信用信息基础数据库).
• Guiding banks to enhance the use of credit info in pre-loan, in-loan, and post-loan processes.

(二十) Orderly Path to Credit Redemption

Giving SMEs a chance to rebuild.

Providing services to SMEs that voluntarily correct illegal/dishonest behavior, helping them repair records and rebuild credit, promoting shared recognition of repair results.

(二十一) Comprehensive Performance Evaluation for High-Quality Development

Boosting local government initiative in supporting SME financing, enterprise cultivation, information sharing, and improving the credit environment, incentivized through performance evaluations.

VIII. Making It Happen: Organization and Implementation

Putting plans into action.

(二十二) Refining Policy Details

All involved departments will promptly formulate and issue detailed policies, creating a combined effort to solve SME financing difficulties.

(二十三) Ensuring Policy Rollout

Banks are to formulate and implement plans according to this notice, strengthen internal coordination, and ensure policies reach the grassroots level to effectively improve financial service quality for SMEs.

The Road Ahead: A New Era for SME Financing in China?

This comprehensive package of measures signals a clear and determined effort by Chinese authorities to address one of the most persistent challenges for economic dynamism: SME access to capital.

For founders and SMEs, this could mean more diverse funding options, potentially lower costs, and clearer pathways to growth, including listings on platforms like the New Third Board (Xīn Sān Bǎn 新三板) and the Beijing Stock Exchange (Běi Jiāo Suǒ 北交所).

Investors and tech enthusiasts should watch closely as these policies unfold. They could unlock significant value in China’s vast SME sector, particularly for those in innovative and strategically important industries.

The emphasis on data, targeted support, and robust implementation frameworks suggests a serious commitment to making these initiatives stick, potentially reshaping the landscape for small and micro enterprise financing in China for years to come.

References

• CBN (China Business News)
• People’s Bank of China
• China Securities Regulatory Commission