CRI听力: China to Set up Consumer Finance Companies in Four Cities

Anchor:
China's banking regulator has said it would launch consumer finance companies in four cities, including Beijing and Shanghai, on a trial basis.

The firms are expected to help people finance purchase of consumer goods by providing small, flexible loans that require no mortgage and less red tape.

Our reporter Zhangcheng has more.(www.hXen.com)

Reporter:
With its exports in a slump after the global financial crisis, China is striving to create growth by stimulating consumer demand.

Now, consumer finance companies will set up in some Chinese cities to aid in that effort by providing small, easy-to-access loans.

And the amount of each loan offered is usually capped under 100,000 yuan.

Chen Qiong is a senior official with the China Banking Regulatory Commission.

"Consumer finance companies target consumers with a medium to low but stable income, such as young families. Through these banks, we want to boost people's purchase of durable consumer goods. "

The consumer finance firm is not allowed to accept deposits and would have to rely on its own capital in the initial stage.

Unlike bank loans, these loans would be available to clients within an hour after the application, and services would even be available outside of regular business hours.

Many consumers say that given these conditions, they would use such consumer finance companies as a way to buy goods.

"I will. This way is more convenient and fast."

"I think this way is fashionable and it will be welcomed by thousands of white collars."

Big retailers in South China's Guangdong and Jiangsu Provinces have already adopted "payment by installment" plans to get more consumers to buy durable consumer goods such as computers and home appliances.

In 2008, Suning, one of China's largest home appliance retailers, increased sales volume of 350 million yuan by adopting the "payment by installment" strategy.

In the face such ambitious plans from retailers, experts say newly-established consumer finance companies must provide flexible and favorable small loans to consumers, otherwise they won't be able to grab a share of the market.

Zhangcheng, CRI News.