Small Secured Loan: Support For Re Employment

Recently, the Information Office of the State Council published the white paper on China's employment situation and policy. This is the first white paper on China's employment situation and policy.

In the white paper, we refer to "providing small loans for laid-off and unemployed people to self employment and self employment, and establishing a guarantee fund by the government and providing financial discount."

Previously, the small guarantee loan business provided by laid-off workers for self employment has been carried out for more than a year.

As mentioned above, the white paper is undoubtedly a great benefit to the financial business related to people's livelihood.

Employment is the foundation of people's livelihood.

China has nearly 1 billion 300 million people and is the most populous country in the world.

In China, the task of solving the employment problem is arduous, arduous and urgent.

The Chinese government has always attached great importance to the employment problem from the fundamental interests of hundreds of millions of people.

As the core of the modern economy, the financial industry is duty bound to support the government in solving the problem of employment and re employment.

At the end of 2002, in order to implement the spirit of the notice of the CPC Central Committee and the State Council on further reemployment of laid-off workers, four ministries and commissions such as the people's Bank of China jointly formulated the measures for the management of small loans for laid-off workers, respectively, with detailed provisions on the objects and conditions, procedures and uses, quota and duration, interest rates and discount rates, and related loan guarantee funds, guarantee institutions, loan management and assessment, supervision and auditing respectively.

The promulgation and implementation of the measures support the re employment of laid-off workers to a certain extent.

By the end of 2003, the balance of the small loans guaranteed by banks was 736 million yuan, and the total amount of microcredit was 806 million yuan.

However, after more than a year's operation, this business has also exposed some problems which need to be solved urgently.

The first problem is that the enthusiasm of commercial banks is not high and business start-up is difficult.

The reemployment of laid-off workers is mainly engaged in meager profit projects such as service, catering, repair, etc., with low technology content and uncertain factors, and granting small credit loans to laid-off workers.

In view of risk, the grass-roots commercial banks lack initiative in this regard.

Secondly, it is difficult for laid-off and unemployed to get valid documents.

According to the regulations, laid-off and unemployed people need to have the "re employment permit" issued by the labor and social security department. However, at present, the laid-off unemployment system in cities and towns is not yet sound, and a considerable number of laid-off workers have not yet obtained the certificate, so it is difficult to obtain small secured loans.

Third, it is difficult to obtain a loan guarantee.

At present, the small loan guarantee fund for laid-off workers is mainly raised by the same level finance, and the special store is stored in the commercial bank designated by the finance department at the same level, which is closed for operation and special purpose.

At this stage, no guarantee fund has been established under the county level and below the county level, and most of the credit guarantee institutions have not yet been established. Laid-off workers can not obtain loan guarantees.

Fourth, it is difficult to get financial subsidies in place.

The Measures stipulate that the financial departments at the same level shall, together with the economic and trade departments and labor and social security departments, determine the maximum amount of the annual compensation rate of the loan guarantee fund, and make up for the compensatory losses within the limit and the loan guarantee fund itself, which cannot be borne by the finance department at the same level.

Because of the limited financial resources in some places, it is very difficult for the laid-off and unemployed workers to get financial subsidies for their small loan losses.

Fifth, it is difficult to handle loan procedures.

Loans for laid-off and unemployed persons must go through applications, community recommendation, labor and social security department review, loan guarantee institutions examination and approval, guarantee and commercial banks' nuclear loan procedures. They need to run many departments, examine and approve them at various levels, and the loan procedures are more complicated.

The above problems have aroused the attention of the relevant government departments.

In order to further promote the work of small secured loans for laid-off workers, the State Council, the Ministry of Finance and the Ministry of labor and Social Security jointly issued the notice on further promoting the work of small secured loans for laid-off workers in March this year.

The notice stressed the need to further improve the management of small loans for laid-off workers, improve the compensation mechanism, and simplify the procedures for loan guarantee and loan approval.

What is particularly worth mentioning is that the notice first proposed that banks should increase credit support for labor-intensive small businesses that meet loan conditions and recruit new jobs to a certain extent.

The fact proves that as long as the measures are in place, the small guarantee loan can support a new blue sky for the reemployment workers.

In 2003, a total of 4 million 400 thousand laid-off workers were reemployed, 1 million 200 thousand of whom were 50 years of age and over 40 years of age.

Many of the 4 million 400 thousand employees have been re employed because of their small secured loans.

As one of the many preferential policies to help laid-off workers to re employment, the market prospect of small secured loans in our country is very bright.