Within a year, underground credit markets quickly exploded in Wenzhou City and many other places of China like Guangdong or the area of Inner Mongolia. This shows that the impact of the credit crunch for the activities of the private business. At the same time, it also alarmed computer big risks of the condition increased interest rates on credit repair informal lending market is growing and spreading in China.
Wenzhou is considered the "capital" of small and medium enterprises with nearly 400,000 businesses. The credit market boom in increasingly black cities such as Wenzhou when individuals or businesses have more credit monitoring services cash in here want to earn more profit than by giving the small and medium business loans with interest rates from 40% a year or more. The Chinese Central Bank said almost 90% of the residents in the city of Wenzhou and nearly 60% of businesses in this engaging in private credit markets.
When participating credit repair in this market, but big profits but the lenders suffer high risk levels that many people commented "like a gamble". For owners of small credit card businesses, they have no choice other than to seek the source of private credit to borrow money despite having to pay high interest rates;
Among small and medium enterprises in the 360,000 Wenzhou, from the beginning of the year have 30% of withdrawn or closed. Some businesses go bankrupt had to loan with interest each year up to 120%. In addition, almost 100 business owners tried to flee and had three people committed suicide because can not repay huge debts.Break bulk black credit in China
Unable to repay the debt with interest from black, more than 90 credit business owners in Wenzhou (Zhejiang Province, China) fled, three people committed suicide.
Within a year, underground credit markets quickly exploded in Wenzhou City and many other places of China like Guangdong or the area of Inner Mongolia. This shows that the impact of the credit crunch for the activities of the private business. At the same time, it also alarmed computer big risks of the condition increased interest rates on informal lending market is growing and spreading in China.
Estimates of the private credit market of China accounted for about 10% of GDP. The strong development of this market raised concerns about the risk of outbreak of bad debt in the world's most populous nation.
Wenzhou is considered the "capital" of small and medium enterprises with nearly 400,000 businesses. The credit market boom in increasingly black cities such as Wenzhou when individuals or businesses have more cash in here want to earn more profit than by giving the small and medium business loans with interest rates from 40% a year or more. The Chinese Central Bank said almost 90% of the residents in the city of Wenzhou and nearly 60% of businesses in this engaging in private credit markets.
When participating in this market, but big profits but the lenders suffer high risk levels that many people commented "like a gamble". For owners of small businesses, they have no choice other than to seek the source of private credit to borrow money despite having to pay high interest rates;
Many businesses lack capital in China can't access loans of banks to turn to the private credit market with annual interest rates of up to 100%, higher than the 15 times the standard lending rate that the Central Bank of China. This was due to the Bank of China were not allowed to apply a higher interest rate for the loans much risk should mainly just for the large enterprise loans, avoiding the small and medium enterprises.
However, in the context of General exports to China are in decline due to the world economic situation is complex and variable salaries paid to workers, many businesses in Wenzhou have fallen on the scene could not repay and led to mass bankruptcies. Among small and medium enterprises in the 360,000 Wenzhou, from the beginning of the year have 30% of withdrawn or closed. Some businesses go bankrupt had to loan with interest each year up to 120%. In addition, almost 100 business credit card owners tried to flee and had three people committed suicide because can not repay huge debts.
Post a Comment