Policy financing is the financial support provided by policy banks or other banks for certain projects, and is guaranteed by government credit according to national policies. Mainly in the form of low interest rate or even interest-free loans, with strong pertinence and strong financial function.
Policy financing is suitable for projects with industrial advantages, high technology content, independent intellectual property rights or in line with national industrial policies, and usually requires enterprises to operate well, reach a certain scale and improve basic management. Policy financing has low cost and low risk. The disadvantages are narrow application, small quantity, long time, many links, complicated procedures and certain scale restrictions.
The government's policy financing includes both financing projects directly managed by the financial department and financing projects managed by policy banks. This kind of policy financing is not for profit, with low interest rate and long or short repayment period, which is more suitable for making up for the lack of market investment in underdeveloped areas. The government improves the effect of financial investment through policy financing; By recovering investment, the government's ability to manage investment can be expanded.
In this regard, we should learn from the experience and methods of the World Bank in managing financing projects and establish an efficient government investment and financing mechanism. Infrastructure and project construction, by the government or social welfare institutions to undertake the main investment; To invest in monopolistic basic industries, it is necessary to establish legal person investors, raise funds from financial institutions and capital markets on the premise of having a certain proportion of capital, and attract social funds widely.
Therefore, it is necessary to strengthen the investment subject status of enterprises, establish a restraint mechanism for investment risks, and ensure the smooth flow of financial investment channels. In addition, financial and economic guarantees and financial interest subsidies are also policy means that the government can flexibly use in investment. Through selective guarantee and discount, support economically underdeveloped areas to lend to commercial banks and international financial economy, or support financial intermediaries among regional enterprises. It will play a positive role in alleviating the shortage of funds in development.
In order to support the development of small and medium-sized enterprises, the relevant state departments, industry authorities and local government departments have separately or jointly issued a series of policies related to financing for small and medium-sized enterprises. In these policies, different financing tools that enterprises can adopt are reflected respectively.