People’s Governments of Towns, Sub-district Offices, and Departments of the Municipal Government,

The Management Measures of Yiwu City for “Zhuandaitong” for Small and Medium-sized Enterprises (Revised) have been approved by the Municipal Government and are hereby issued to you. Please implement them earnestly.

Office of the People’s Government of Yiwu City

Mar. 13, 2020

(This document is publicly available.)

Management Measures of Yiwu City for “Zhuandaitong” for Small and Medium-sized Enterprises (Revised)

In accordance with the gist of relevant documents of Yiwu City, Zhejiang Province, and the State Council and in combination with the reality of the city, the financial product “Zhuandaitong” is set up after study, and these Measures are formulated in order to effectively alleviate the on-lending financial pressure of small and medium-sized enterprises (SMEs), boost their confidence, crack down on illegal private fund-raising and high-interest lending, maintain financial order, guard against regional financial risks, and promote the steady and healthy development of finance and economy in Yiwu.

I. Product Definition

“Zhuandaitong” is a "low-cost, guarantee-exempt, and inclusive" short-term credit financial product set up by the government and undertaken by banks to specially raise on-lending funds for the working capital loans of SMEs. “Zhuandaitong” loans are issued in the form of credit.

II. Management Pattern

A Financial Service Coordination Group of Yiwu City for the On-lending Work of SMEs (hereinafter referred to as “the Coordination Group”) shall be set up, with the leader in charge from the Municipal Government as the group leader and the principals of various competent departments of industries, such as the Office of Leading Group for Promoting the Stable and Healthy Development of Enterprises, Finance Office, Economy and Information Technology Bureau, Finance Bureau, People’s Bank of China, and Yiwu Group, Jinhua Branch, China Banking and Insurance Regulatory Commission, as the members. The Coordination Group shall be set with an office located in the Finance Office of Yiwu to take responsibility for the organization, coordination, and operation of “Zhuandaitong”.

III. Operation Pattern

Banking institutions willing to undertake the business of “Zhuandaitong” shall apply to the Office of the Coordination Group and shall be submitted, after preliminary examination, to the Coordination Group for merit-based selection. The Finance Office shall sign a cooperation agreement with the undertaking bank.

The undertaking bank and the refinancing bank shall sign the Cooperative Operation Agreement of “Zhuandaitong” Business, with the Office of the Coordination Group being the witness party in the agreement.

The undertaking bank and the refinancing bank shall agree to accept relevant provisions of the Measures before undertaking and participating in the “Zhuandaitong” business.

IV. Applicable Objects and Conditions

The applicable objects of “Zhuandaitong” business shall be:

(I) Enterprises registered and established in Yiwu in accordance with the law, with normal production and operation (industrial enterprises not falling under Class D in the comprehensive evaluation on per-mu output benefit);

(II) Enterprises from counties and cities that have reached strategic cooperation agreements with Yiwu and from the Jinyi New Urban District (industrial enterprises not falling under Class D in the comprehensive evaluation on per-mu output benefit);

(III) Micro and small-sized enterprises and market dealers;

(IV) Enterprises that need to use “Zhuandaitong” as proposed by banking financial institutions.

The applicable objects shall meet the following conditions:

(I) The working capital loan business of the enterprise occurs in the banking institution in Yiwu City, and the date and scale of the applied refinancing related to this loan are within the effective credit granting scope;

(II) The amount of this loan is RMB 300 thousand or above;

(III) The refinancing bank of this loan agrees with refinancing, and the materials and formalities related to the refinancing are complete;

(IV) The on-lending risks, such as lawsuit, account freezing, or sealing-up of collateral, involved in this loan are controllable.

V. Loan Requirements

The mode of “paid use, repaying immediately after borrowing” shall be adopted; the credit funds provided shall be only used for the refinancing for the enterprise’s bank loan; the length of maturity shall not exceed 7 days in principle; the refinancing formalities shall be completed on the same day in principle.

VI. Rate Control

The loan interest rate and handling fee of “Zhuandaitong” product shall be classified as follows and stipulated in the agreement:

(I) The on-lending interest rate of “Zhuandaitong” shall be 0.2‰ per day;

(II) The on-lending interest rate shall be lowered to the loan prime rate (LPR) for key enterprises of Yiwu, which refer to the high-quality enterprises and enterprises to be bailed-out in the Three Lists of Corporate Financing, including but not limited to top 50 industrial enterprises, Class-A enterprises, national hi-tech enterprises, listed enterprises, enterprises to be listed, listed enterprises on the New Third Board, candidate enterprises for listing on the New Third Board, and enterprises in the “Multiplication Program”;

(III) Where the loan is repaid on the same day, a one-day handling fee shall be charged at the rate of 0.2‰ of the on-lending amount. If the loan cannot be repaid on the same day, a handling fee of 0.2‰ of the on-lending amount shall be charged on the first day, and the interest shall be calculated from the second day at the corresponding rate mentioned above.

Refer to the aforesaid standards for the enterprises from counties and cities that have reached strategic cooperation agreements with Yiwu and from the Jinyi New Urban District.

VII. Handling Procedure

The procedure shall be: application by the enterprise to the undertaking bank, preliminary qualification review by the undertaking bank, refinancing confirmation by the refinancing bank, witnessing of refinancing by the Office of the Coordination Group, loan approval by the undertaking bank, loan release by the undertaking bank, repayment to the refinancing bank, on-lending and recovery, and documentation archiving.

VIII. Risk Prevention

Risks arising during the operation of “Zhuandaitong” business shall be borne by the undertaking bank and the refinancing bank, which shall be specified in the agreement. The undertaking bank shall communicate with the refinancing bank in real time to do a good job in the closed operation and tracking supervision of funds.

IX. Reward and Punishment Mechanisms

(I) Reward Mechanism

The Finance Bureau of Yiwu shall give the undertaking banks rewards of 0.5‰ of the on-lending amount. The reward funds shall be allocated according to the proportion of each undertaking bank's on-lending amount in the total of the whole city, and the total amount of rewards shall not exceed RMB 15 million per year.

Banking institutions undertaking and participating in the “Zhuandaitong” business shall be awarded bonus points in the annual assessment on the support for local economic development.

(II) Punishment Mechanism

Any enterprise that fails to repay the principal and interest of “Zhuandaitong” within the time limit specified in the contract shall be included in the Negative List of “Zhuandaitong”, and its relevant application shall not be accepted any more. Besides, the case shall be included in the municipal credit platform, and its corporate credit and the personal credit of its legal representative shall be disposed of in line with relevant provisions.

X. Miscellaneous Provision

The Measures shall come into force 30 days after the date of promulgation and shall be valid for 3 years. The Notice of the Office of the People’s Government of Yiwu City on Issuing the Management Measures of Yiwu City for “Zhuandaitong” for Small and Medium-sized Enterprises (Trial) (YZBF [2015] No. 20) issued in 2015 shall be repealed simultaneously.