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China : ICBC Offers Innovative NEEQ Equity-pledged Loans

June 26, 2014

ICBC has recently creatively launched equity-pledged lending business to medium, small and micro-sized enterprises listed on the National Equities Exchange and Quotations (NEEQ). This means enterprises listed on the NEEQ can obtain loans from banks by pledging their equities in the future, which provides a new financing channel for small and micro enterprises ( SMEs ).

An executive with ICBC said the innovative part about NEEQ equity-pledged loans lies in the guarantee mode. For non-listed companies, it is difficult for banks to value their equity. But when such an enterprise is listed on the NEEQ, its equity is given a transaction value. Therefore, using the equity of such enterprises as a means of guarantee allows some R&D-heavy but asset-light SMEs to enjoy convenient financing services of banks. As regards to risk control, while referring to the transaction value of the equity, ICBC will also take into account the operation condition, cash flow and future growth potential of the enterprises listed on the NEEQ.

Founded on September 23, 2005, Beijing Zhongxun Sifang Science & Technology Co., Ltd. is specialized in the research, development and manufacture of microelectronic devices, microwave modules, and communication system integration-related products. As a national high-tech enterprise with independent R&D capability, the company was successfully listed on the NEEQ on November 18, 2010, becoming the 75th enterprise listed on this market. Lately, it has obtained a loan of RMB 2 million from ICBC Beijing Branch in the form of NEEQ equity-pledged loan.

NEEQ is established for national equities exchange according to the Securities Law upon the approval of the State Council and mainly serves the development of medium, small and micro-sized enterprises of innovative, start-up and growth nature. As of May 8, 2014, 740 companies were listed on the NEEQ, with a total market capitalization of RMB 143.4 billion.

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Source: TendersInfo (India)

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