Mon, Dec 31, 2012 - Page 14 News List

Loans to SMEs exceed forecast annual targets

Staff writer, with CNA

Banks have extended more new loans to small and medium-sized enterprises (SMEs) in the first 11 months of this year than were targeted by the government for the entire year, the nation’s financial regulator said on Saturday.

According to the Financial Supervisory Commission (FSC), banks in Taiwan loaned NT$314.8 billion (US$10.82 billion) to SMEs from January to last month, 43 percent higher than the government’s full-year target of NT$220 billion.

The figure indicates that Taiwan has met its targets for supporting SME expansion this year, the FSC said.

According to the Small and Medium Enterprises Administration of the Ministry of Economic Affairs, SMEs in the manufacturing, construction and mining sectors are defined as those with paid-in capital of less than NT$80 million.

SMEs outside those three sectors are defined as incorporated entities that generate less than NT$100 million in sales a year.

The ministry said Taiwan has 1.28 million SMEs, representing about 97.63 percent of the country’s businesses. Roughly 56 percent of them are owned by individual proprietors.

The FSC said the loans extended to local SMEs from January to last month accounted for 49.62 percent of all new loans issued to the public and private sectors during that period, up 2.81 percentage points from the end of last year.

Loans to SMEs also accounted for 53.37 percent of total lending to the private sector, up 2.01 percentage points from the end of last year.

As of the end of last month, the average non-performing loan ratio on loans to SMEs stood at 0.54 percent, down 0.05 percentage points from the end of last year, the FSC said.

The commission said it will continue to encourage local banks to provide loans to SMEs, but also urge them to more tightly control risks when lending to the sector.

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