SME Loans Replace Property Lending to Be Staple Product

Taipei, July 6, 2010 (CENS)--To cool off the overheated real estate market, the central bank in Taiwan recently adopted measures to curb excessive lending to housing developers, forcing banks as E Sun Bank, Jih Sun International Bank, and Sunny Bank to refocus on small- and medium-sized enterprises instead of property developers and mortgage borrowers.

N. C. Huang, president of E. Sun, indicated that skyrocketing property prices are raising lending risks, so the bank will tighten mortgage lending and lower the proportion of property loans to 40% by the end of this year from 42% as of the end of May.

Meanwhile, the bank has decided to increase SME loans by 15% to US$3.94 billion this year. As of the end of May, the bank's loans to SMEs totaled US$3.75 billion, which is very likely to rise to over US$3.94 billon by the yearend. Huang believes SME loans might help boost the bank's total loans by 8%-10% to US$19.09 billion for the year.

Sunny Bank is said to follow suit. P. L. Lin, chairman of the bank, noted that Sunny aims to raise the proportion of SME loans to 45%-55% this year, with SME loans being US$5.05 billion currently, modestly shy of its target by US$303.03 million.