Beijing issued draft rules Tuesday allowing non-deposit taking foreign institutions to offer consumer loans on the mainland, Bloomberg reported. Foreign and domestic institutions with minimum total assets of US$12 billon held over the past year will be allowed to create financing companies that provide consumer loans for purchasing appliances and other goods, according to draft rules posted on the China Banking Regulatory Commission’s web site. Companies must have at least five years experience in providing consumer loans and have been profitable for the past two years. While state-owned banks have already lent billions to domestic corporations and other state-owned entities, stimulating consumer spending remains a priority. “Consumer spending is the segment of the economy that the government most wants to stimulate right now,” said Ma Jun, Deutsche Bank’s chief China economist. “Allowing more consumer financing is symbolic of how important it is.”
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