Qidong Rural Commercial Bank provides bank-tax products for small and micro rural enterprises, so they get easier access to finance. [Photo/ntfabu.com]

Jiangsu Bisong Lighting Co Ltd is a thriving manufacturer of lighting appliances and accessories, based in Qidong – a county-level city administered by Nantong in East China's Jiangsu province – that is now going places, thanks to an innovative financial lifeline it was given by the local bank.

The company received a new funding product called a Shuiyidai Loan, which transforms tax credits into bank funding, which is proving especially effective in rural areas and is being directed to small and micro rural enterprises in particular.

But Jiangsu Bisong Lighting originally got into trouble when, in order to keep up with the global developments in green lighting, it increased its R&D on LED lighting and expanded production in 2018, resulting in an urgent need of working capital.

However, it was difficult for Bisong to obtain new loans, for various technical financial reasons.

"After learning about Bisong's difficulties, we immediately provided them with a Shuiyidai Loan based on the actual situation," said an executive at Qidong Rural Commercial Bank.

Given the urgency of the enterprise's need of funds, the bank reportedly made every effort to speed up finance approval procedures and coordinated with the local tax department to provide the enterprise's ratal – the amount on which rates or taxes are assessed – and its tax credit grade. Finally, the bank issued a 2 million yuan ($305,200) credit line to the company, making Bisong one of the first beneficiaries of the Shuiyidai Loan.

"We achieved growth against adversity and expanded our scale of production this year," a company executive said.

"Qidong Rural Commercial Bank has issued another 3 million yuan in an incremental Shuiyidai Loan to us for production equipment procurements," he added.

In the wake of new requirements issued by the banking and insurance regulatory department – that banks should focus on their main business areas and responsibilities – Qidong Rural Commercial Bank has embarked on integrating its business in the rural market, providing funding services for small and micro businesses and the real economy.

"Rural enterprises usually face difficulties such as high expenses and complicated procedures in the financing process, due to their small scale and lack of loan guarantees," said a manager in charge of loan and financing at Qidong Rural Commercial Bank.

"To solve these problems, we changed our service methods in 2017 and formed a bank-tax service system, which transforms tax credit grades into finance capital and is suitable for rural areas," he added.

The bank said it has developed new bank-tax products such as the Shuiyidai Loan and its Shuiyitong Loan, to reduce financial costs for taxpayers, as well as simplified loans procedures to enhance its services.

By the end of February, Qidong Rural Commercial Bank had issued 469 Shuiyidai Loans valued at 761 million yuan, benefiting 219 applicants, as well as 1,278 Shuiyitong Loans valued at 90.93 million yuan.