Chinese authorities have booted 48, mostly state-owned, enterprises off an official list of companies eligible for special low-cost loans under a government initiative to boost financial help for firms actively engaged in the battle against the coronavirus epidemic out of concern the loans would not be used for their intended purpose, reported Caixin.
The 48 companies comprise five coal producers, 38 transport companies and five local government financing vehicles. Some of them had tried to get loans under the RMB 300 billion ($42.8 billion) special-purpose relending program by pretending to produce goods such as disinfectants, said Caixin sources. Loans already made to these companies will no longer benefit from the preferential interest rates, they said.
The People’s Bank of China (PBOC) announced the program on Feb. 1 as part of the government’s response to the outbreak of the deadly coronavirus. The central bank said it would offer RMB 300 billion of funding to national commercial banks and local banks so that they could offer cheap loans to key enterprises engaged in production, transportation and sales of crucial medical supplies for the purpose of epidemic prevention and control as well as daily necessities.