MICROCAPITAL BRIEF: Taiwanese Banks Taishin, Chinatrust, SinoPac, Cosmos to Enter Chinese Microcredit Sector

Several Taiwanese banks reportedly have expressed interest in establishing microcredit companies in China after Taiwan’s Financial Supervisory Commission (FSC) relaxed regulations on such cross-border financial operations in July 2012. Although Chinese branches of Taiwanese banks must wait for long periods to become licensed by Taiwanese regulators to issue larger loans in Chinese yuan, they are allowed to offer loans of less than CNY 50,000 (USD 7,800) with maturities of up to two years without delay. Taiwanese financial institutions reportedly are also interested in entering the Chinese leasing business for the same reason.

The four Taiwanese banks that have expressed interest in beginning microfinance operations in China are Taishin Financial Holding Company, Chinatrust Financial Holding Company, SinoPac Holdings and Cosmos Bank.

The 39 Chinese microfinance institutions (MFIs) that reported 2011 data to the US-based nonprofit data provider Microfinance Information Exchange (MIX) held a median gross loan portfolio of USD 1.04 million disbursed to a median of 1,300 borrowers.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

Focus Taiwan: “Taiwanese Banks Plan to Tap into China Through Micro-credit Business,” http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201207290018

MicroCapital.org story, July 10, 2012, “MICROCAPITAL BRIEF: Sagamore to Place $22m in Equity In Accion Microfinance China, Taking 70% Stake,” https://www.microcapital.org/microcapital-brief-sagamore-to-place-22m-in-equity-in-accion-microfinance-china-taking-70-stake/

MicroCapital.org story, July 2, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan $50m to Jiangsu Financial Leasing of China for On-lending to Small and Medium-Sized Enterprises (SMEs) in Education, Healthcare,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-loan-50m-to-jiangsu-financial-leasing-of-china-for-on-lending-to-small-and-medium-sized-enterprises-smes-in-education-healthcare/

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