People's Bank of China Governor Pan Gongsheng stated at a recent press conference held by the State Council Information Office that in terms of the structure of monetary policy, efforts are focused on key links in high-quality development. A re-lending facility for technological innovation and technical transformation has been established to increase financial support for technological innovation and equipment updates and upgrades.

This year, commercial banks have seized the opportunities for the development of new quality productive forces, focusing on the major issue of technology finance, actively innovating financial products and service mechanisms, and meeting the credit needs of technology companies throughout their entire lifecycle.

Improving the Institutional Framework

The "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization," reviewed and adopted by the Third Plenary Session of the 20th Central Committee, proposes to build a technology finance system adapted to technological innovation and to strengthen financial support for major national scientific and technological tasks and small and medium-sized technology companies.

Shen Lu, a researcher at the China Inclusive Finance Research Institute of Renmin University of China, said that this decision not only reflects China's high regard for innovation-driven development but also provides a clear direction for improving the technology finance system. The primary reason for improving the institutional framework is that the current financial system needs to be more closely integrated with technological innovation. By constructing a more robust technology finance system, it can effectively address the financial difficulties faced by small and medium-sized technology companies during technological innovation, industrial upgrading, and scaled production. At the same time, through policy guidance and financial support, the government can better promote the accelerated growth of technology innovation companies, enhancing the sustainability and international competitiveness of China's economic development.

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Technology finance is one of the five major issues proposed at the Central Financial Work Conference. This year, commercial banks have guided funds to "drip irrigate" the field of technological innovation, effectively promoting the development of new quality productive forces.

"Commercial banks improving the institutional framework in the field of technology finance is a key measure to respond to the demands of technological innovation, strengthen risk management, and promote the integration of industry and finance. This is not only conducive to the growth of technology companies but also has significant importance for promoting the innovation-driven development of the entire economy," said Ye Yindan, a researcher at the Bank of China Research Institute. An improved institutional framework helps commercial banks establish closer cooperation with technology companies, research institutions, government departments, etc. Through institutional innovation, commercial banks can participate in the research and development and transformation of scientific and technological projects, achieving an effective connection between financial capital and technological resources. This integration of industry and finance can not only provide more comprehensive financial services for technology companies but also help banks identify and cultivate new growth points, achieving diversification and sustainable development of banking business.

This year, the heat of technology finance has not diminished, and financial regulatory authorities have successively introduced relevant policies to further refine measures for the development of technology finance and increase incentives for the development of technological innovation. For example, the People's Bank of China, the Financial Regulatory General Administration, and other departments jointly issued the "Work Plan for Solidly Doing a Good Job in Technology Finance" (hereinafter referred to as the "Work Plan"), proposing a series of targeted work measures around cultivating a financial market ecosystem that supports technological innovation. In addition, the Financial Regulatory General Administration issued the "Notice on Strengthening Financial Services for the Entire Lifecycle of Technology Companies," which clarifies the need to increase financial services for sci-tech innovation companies.

Industry experts said that from the perspective of commercial banks supporting technological innovation, commercial banks should formulate clear technology finance policy guidelines according to national science and technology development strategies and regulatory requirements. This includes clearly supporting credit policies for technology companies, risk tolerance, incentive mechanisms, etc. Through these policy guidelines, banks can ensure that their technology financial services are consistent with national strategies while providing clear guiding principles for internal operations.

Innovating Financial ProductsWith the rapid development of innovative technologies, the role of technology-based enterprises in promoting economic growth and technological advancement is becoming increasingly prominent. However, the characteristics of high growth and high risk of technology-based enterprises determine that their demand for funds has particularities. Traditional financial tools and financing products often find it difficult to meet the needs of different technology-based enterprises.

"There is a mismatch between the design of traditional financing products and the financing needs of science and innovation enterprises, which cannot fully meet the capital needs of technology-based enterprises and to some extent restricts the development of technology finance," said Shen Lu. Technology-based enterprises have obvious characteristics of light assets, usually lacking historical revenue data with long-term stable cash flow, effective collateral, and coupled with the potential risks of innovative technologies, making it difficult to fully obtain bank credit support.

Ganzhou Haoding Furniture Co., Ltd., located in Quannan County, Jiangxi Province, is a technology-based small and medium-sized enterprise focusing on furniture design and specializing in the research and development and manufacturing of new types of furniture. The company encountered financing difficulties in expanding the research and development investment of new furniture. After the bank understood the situation, it provided credit products such as "Science Loan Pass" based on the company's operating and cash flow characteristics. "The 1.5 million yuan 'Science Loan Pass' issued by the Bank of China will help the company increase research and development investment and technological transformation," said Li Huaxing, the chairman of the company.

In practice, the introduction of innovative financing products is not only of great significance to technology-based enterprises but also helps financial institutions to improve their business capabilities. By designing and launching innovative financing products, financial institutions can expand new business areas and enhance their competitiveness in the field of technology finance.

To promote the development of technology-based small and micro enterprises, banks also rely on digital technology to optimize financing models. The Anhui Branch of the Construction Bank, targeting high-tech and "specialized and new" "little giant" enterprises, enriches the "product corridor", uses the Construction Bank's science and innovation evaluation system, and achieves automatic scoring of technology-based enterprises through digital means, based on which credit is granted and financial products are matched. Under the guidance of the Zhejiang Supervision Bureau of the State Financial Supervision Administration, the Jinhua Branch of the Industrial and Commercial Bank of China strengthens digital finance empowerment, innovates unsecured credit loan products such as "Jinke E-loan", and promotes financial institutions such as the Pan'an Branch of the Industrial and Commercial Bank within its jurisdiction to combine local scientific and innovative difficulties, accurately match exclusive credit, and help scientific and innovative enterprises explore new financing paths.

Ye Yindan analyzed that with the rapid development of technology, technology-based enterprises have higher and higher requirements for the efficiency and quality of financial services. Commercial banks improve the intelligence and accuracy of services by introducing advanced financial technology means such as big data analysis and artificial intelligence. This refinement of services can not only enhance the service experience of users but also help banks improve their service capabilities and market competitiveness.

Innovation in financing products and services in the field of technology finance is key to supporting the development of technology-based enterprises. Experts say that commercial banks need to continuously innovate financial products. This includes developing credit products that match the growth cycle of technology-based enterprises, providing intellectual property pledge loans, and exploring financing models that combine equity and debt. Through these innovations, banks can strengthen joint services with multiple departments to provide more diversified and personalized financial services for technology-based enterprises to meet their needs at different development stages.

Ye Yindan suggests that commercial banks can participate in the equity structure of enterprises through venture capital and other means, share risks and growth benefits with enterprises. This innovation in financing methods helps enterprises obtain funds without sufficient collateral, and also provides banks with the opportunity to participate in the growth of enterprises. In addition, personalized credit products can be designed based on the industry characteristics and development stages of enterprises. This customized service can not only better meet the actual needs of enterprises but also help banks improve service quality and customer satisfaction.

Improving Service Quality and Efficiency

In recent years, refining diversified services has become a major trend in the financial industry. Refining services is not only to meet the differentiated needs of customers but also to improve the allocation efficiency of financial resources and enhance the overall competitiveness of the financial system.Shen Lu stated that due to the different stages of development that technology-based companies go through, from the seed stage to maturity, these companies have varying financing needs and risk preferences. Therefore, financial services should also be further segmented and optimized according to the needs of companies at different stages.

In Zhejiang, where technology-based small and medium-sized enterprises (SMEs) are concentrated, to promote the allocation of financial resources to the township level, Pengjie Town in Taizhou City has innovated and deepened the "Helping Enterprises Understand All" service mechanism, actively building a bridge between banks and enterprises. With the assistance of the "Helping Enterprises Understand All" team, Taizhou Pengjie Branch of Zhejiang Tailong Bank has tailored intellectual property hybrid secured loans for sci-tech enterprises, taking into account the patents and inventions of technology-based companies. It is understood that Tailong Bank has been providing diversified services throughout the entire life cycle of small and micro enterprises from the seed stage, offering intellectual property secured loans to technology-based companies that meet credit conditions, helping enterprises transform "intellectual property" into "assets."

Banks need to continuously refine financial services for the entire life cycle of technology-based companies. For example, startups require high-risk, long-term "patient capital," while growing companies need medium to long-term loans to expand production capacity. The person in charge of the Tianyancha Data Research Institute said that by segmenting services, financial institutions can more accurately and comprehensively understand the credit needs of technology-based companies, which helps to optimize the credit allocation structure. For technology-based companies, this not only meets the funds needed and adapted to different development stages but also reduces various risks caused by financing difficulties.

In the process of providing diversified services, financial institutions should not only focus on the innovation of their business but also ensure compliance. Shen Lu stated that especially in credit services for technology-based SMEs, financial institutions need to adopt more detailed risk assessment methods, strengthen risk monitoring and early warning, and ensure the safety and sustainability of their business. With the diversification of financial products and services, regulatory authorities need to maintain a certain level of tolerance for financial innovation, ensuring the establishment of effective regulatory mechanisms without restricting innovation, to prevent the accumulation of financial risks.