Expanding consumer credit: PBOC looks to support financial firms

The People's Bank of China (PBOC) is reportedly considering providing substantial support for consumer finance companies and automobile finance firms to enhance their financial service capabilities and expand the coverage of consumer credit, according to CCTV News.

The state news agency reported that according to sources close to the central bank, the PBOC intends to support these companies in issuing financial bonds and credit asset-backed securities, with the aim of raising funds and developing unique consumer credit products to meet the increasing demand for consumer upgrades.

It is said that the initial batch of eight consumer finance and automobile finance companies, including Merchants Union Consumer Finance Co, BOC (Bank of China) Consumer Finance, PSBC (Postal Savings Bank of China) Consumer Finance and BYD Auto Finance Co, have already held preliminary discussions with institutions such as CITIC Securities, China International Capital Corp, and China Merchant Securities regarding plans to issue financial bonds and credit asset-backed securities.

The initial issuance scale for these eight companies is estimated to reach approximately 50 billion yuan (US$6.87 billion), and more consumer finance and automobile finance companies will be supported in the future.