When small and medium-sized enterprises borrow money from banks, the interest rate is generally 50% or more above the base interest rate.
Data show that the People’s Bank of China has lowered the benchmark lending rate five times since November 2014, a total of 1.4 percentage points to 4.6. However, the loan interest rates for small and medium-sized enterprises did not fall but rose by 2 percentage points because financial institutions were extremely reluctant to lend to them. The Wenzhou Index, which tracks private lending activities, shows that interest rates on loans with maturities of one year and above have risen from around 16 in November to 18 currently, and even rose to 24 in April.
The current financing situation of small and medium-sized enterprises is completely different from the central bank’s policy. Behind this is the bank’s consideration of the loan qualifications of small and micro enterprises. The bank's comprehensive calculation of enterprise loan interest rates mainly depends on the enterprise's own qualifications, including the industry in which the enterprise is located, the size of the enterprise, financial statements, asset structure, etc. Therefore, in essence, the interest rate faced by small and medium-sized enterprise loans is not closely related to the benchmark interest rate.