Private Lending Is Surging &Nbsp; Shoe Enterprises Debt Crisis Highlights

When Wenzhou entrepreneurs fleeing, jumping off buildings and closing down businesses, these sensitive words frequently stimulate our eyeballs. Most people have found such a problem, that is, Wenzhou, known as the "economic vane", has fallen in the "private lending crisis", including not only small and medium enterprises with backward production capacity, but also the "Star" enterprises that once had boundless scenery, some of which were still in normal production until the accident happened.

What led to the collapse of these "star enterprises" and "advanced enterprises"? In the face of a doubt, where should Wenzhou's economy go?

Reporters recently in Wenzhou

"Our 4 brands are not only good brand effects, regular customers, regular production, and ample orders," said Sun Yuhua, executive deputy general manager of the marketing department of the footwear industry, but also our management and workers want to keep the company alive even after the death of the chairman.

It was not until yesterday that production continued, but the banks froze up the funds, and we could not pay the suppliers. Today the production is forced to stop.

It is understood that up to now, at least more than 80 enterprises in Wenzhou have fled and businesses have gone bankrupt.

26 of them occurred in September.

Since September 22nd, after the 3 cause debt crisis in Wenzhou, the boss was forced to go to a blind alley to commit suicide, resulting in 2 deaths and 1 injuries.

Like Zheng Dali shoes, in the recent batch of Wenzhou enterprises run by the boss or fleeing from the building, some enterprises produced normal and orderly operation before their bosses went out of trouble, many of them were "pioneers" of the industry or even "star enterprises" of Wenzhou.

Zhejiang Xintai group is the key backbone enterprise and large taxpayer in Ouhai District of Wenzhou.

"Private lending is just the last straw".

When he mentioned the death of his boss Shen Kuizheng, Sun Yuhua could not help crying. "If the boss is a good person, he will not go on this road if he is good or bad."

It is understood that since the beginning of this year, private lending in Wenzhou has been unprecedentedly active. In the first half of this year, 48 billion 550 million yuan of private lending has been accumulated. Private lending has become one of the main sources of financing for SMEs.

Local private lending comprehensive interest rates continued to rise, the monthly interest rate reached 3-5 points, some even 6 to 1 cents.

The frenzy of private lending is also evident from the more than 7000 dispute in the first half of this year.

Variety shoe industry

Reporters in Wenzhou local well-known forums to see, netizens so evaluate the current Wenzhou Economy: "usury" under the poisoned Wenzhou economy is like a patient who drinks their own blood to quench their thirst.

But why do so many enterprises still choose to "drink poison to quench thirst"? Zhou Dewen, President of Wenzhou SME Promotion Association, said: "private lending has an objective environment for survival. More than half of the small and medium-sized enterprises can not get enough support from financial institutions. They can only be forced to borrow money from the private sector, stimulating the development of private lending and making it the last straw to crush enterprises".

Some small and medium-sized enterprises in Wenzhou told reporters that under the background of macro control and liquidity tightening, banks in order to maintain profits rise to raise corporate lending rates and detained part of loans as "deposits" lending to other enterprises, extending the gap between loans and even loans, which led to the pition of usury and the crisis.

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"The bank would rather lend the money to the central enterprises that have been losing money, and not lend them to us. The boss of the enterprise is not a fool. If the bank can borrow money, who will go to the usury?" said a leather factory owner who did not want to be named.

"We need to believe that Wenzhou has the strength to resist this risk".

Zhou Dewen said that this is not only a problem of some enterprises in Wenzhou, but if it is not stopped, it will become increasingly intense and spread rapidly.

"The government and banks must rescue themselves at this critical juncture, and enterprises should also have confidence because the fundamentals of Wenzhou enterprises are still good, and most enterprises are still operating normally.

We all need to believe that Wenzhou has the strength to resist this risk. "

Xie Rongfang, executive chairman of Wenzhou shoe leather industry association, said that in response to the crisis, bank support is the first requirement: first, to lower interest rates, and the two is not to pump money.

He stressed that banks need to change their ideas and save enterprises, which is also a way to save banks themselves.

"Only consider the interest rate increase a bit, then even the capital is gone, bad debts are not higher?"

Zhou Dewen suggested that private lending has the necessity of objective existence, and has also played a positive role. Private lending can only be dredging rather than plugging.

"If we beat the death of private lending, we will accelerate the death of the remaining SMEs.

China should promote the legalization of private lending as soon as possible, guide private capital into small banks and loan companies, and control reasonable interest rates at the same time.

Of course, malicious debt should be severely punished.

Reporters learned that, in the face of the current severe financial situation, the Wenzhou municipal Party committee and the municipal government set up a comprehensive coordination mechanism and special working group to deploy intensified measures and take measures simultaneously.

We should make full use of administrative, financial, legal and other means to rapidly carry out risk investigation activities, introduce policies and measures, increase financial support, help enterprises, judicial mediation, early warning of risks, and the disposal of bankrupt enterprises, and resolutely crack down on illegal acts such as evil forces and malicious wages. At the same time, we should intensify propaganda and guidance, strengthen credit building, safeguard social fairness and justice, and ensure social harmony and stability.