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| Sunday, 17 April 2005 |
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ADB investment to boost SME growth The ADB has achieved financial completion of its minority equity stake in the holding company of one of the People's Republic of China's (PRC's) leading private credit guarantee companies, Shenzhen Credit Orienwise Co., Ltd (Credit Orienwise). Integral to its investment, ADB has contributed to the successful restructuring of Credit Orienwise to enable the company to explore future expansion of its capital base and profile. Representatives from ADB, including Toru Shibuichi, Country Director of ADB's Resident Mission in the PRC and William Willms, an ADB Principal Structured Finance Specialist, Chairman Kaiyong Zhang and senior management of Credit Orienwise dignitaries from the PRC Government and senior officials from the Ministry of Finance and the National Development and Reform Commission attended a ceremony in Beijing last week. Credit Orienwise specializes in guaranteeing loans for small and medium enterprises (SMEs). It has successfully provided a credit assessment service and risk mitigation mechanism previously lacking in PRC's financial system. ADB's investment will be used mainly to improve Credit Orienwise's internal information technology systems, increase its capital for growth, and help it expand from its base in Shenzhen to other cities in the PRC. "SMEs are key drivers of jobs, economic growth, and development. However, more than 80% of the SMEs in the PRC have difficulty in accessing financial services and securing financing, while commercial banks lack experience and incentives for assessing SME credit risk," says Willms. "ADB's investment will support further SME growth by increasing access to financing, thereby enhancing sustainable private sector employment and contributing to ADB's overarching goal of poverty reduction." In addition, an ongoing technical assistance grant from ADB is helping to improve access to finance for SMEs in the PRC by promoting development of SME credit guarantee companies through an effective policy, regulatory, and operational framework. Credit Orienwise is the PRC's largest privately owned credit guarantee company. "ADB will help to catalyse additional investment into Credit Orienwise," Willms said. "As in all our investments, ADB will promote best commercial practices and good corporate governance," he said. |
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