The report provides a comprehensive review on the development of the so-called Micro and Small Finance (MSF) market in China, meaning credit services to Small and Micro Enterprises (MSEs), unincorporated but registered urban businesses and MSE owners. 

As the Chinese Medium Enterprises are relatively large, this definition corresponds more or less to the international understanding of MSME finance. A major trend has been the significant heating up of the Chinese market due to a number of factors, e.g., lowering of the entry barriers, deeper down-scaling by large banks, emergence of on-line lending and data-driven lending, development of credit reporting services, etc.

In 2017, more stringent regulation was imposed on financial sector in China. In the meantime, financial inclusion and serving real economy remained as priorities in government’s agenda. Fintech enjoyed rapid growth in 2017. Conventional commercial banks became active in digital transformation, making more investments in technologies such as big data, cloud computing, AI and blockchain. Relationship between commercial banks and Fintech shifted from competition to collaboration. P2P lending industry was in turmoil in the year as several hundreds of small and medium sized platforms collapsed. Several Policies and Opinions on movables finance promotion were issued by government to facilitate MSME access to finance.

This is the tenth annual report on China's MSME finance development, produced by a team led by Shi Jianping and Yang Rubing of the Central University of Finance and Economics.