2011-10-02

SCMP covers Wenzhou loan sharking

Here's an English article on the situation in Wenzhou. Wenzhou in bid to curb loan sharks
One of many company bosses who fled Wenzhou after finding himself unable to pay off maturing corporate loans is returning, mainland media reported, as the city government steps in to save businesses from ruin.
Hu Fulin , chairman of one of Wenzhou's biggest makers of spectacles, Zhejiang Centre Group, has decided to return to the mainland's entrepreneurial capital to deal with a 2 billion yuan (HK$2.4 billion) debt, The Beijing News said.
Hu admitted to colleagues via phone on September 21 that he had run away because he was not able to repay debts to banks and loan sharks.
He was among at least 26 bosses of small and medium-sized Wenzhou businesses to go into hiding due to their debt burdens, said the municipal financial office, China Business News reported. It said nine did so on September 22.
Zhou Dewen , chairman of the Wenzhou Medium and Small Enterprise Association, said the central government's tight monetary policies and high interest rates for private credit were the two main causes of the SMEs' financial woes.
Private lenders in Wenzhou charge interest rates of 25 per cent, up from 23 per cent since January.

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