Private Loan Guarantee Firms Grow As Banks Disregard Small Clients

News: The number of wealth management companies and loan guarantee firms are growing in China to address the demand for financial services from small clients that banks neglect, according to analysts (South China Morning Post). The Communist Party declared in November 2013 that it would boost reforms and open up the financial sector to private investors by 2020, in an effort to provide financial services to individuals and small and medium-sized firms having restricted access to bank loans. Since 2005, the mainland has recorded more than 2,000 cases of illegal fund-raising a year, with the amount involved reaching CNY20bn (US$3.27bn) yearly.

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Geography: China

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