This is the ninth 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. The report provides a comprehensive review on the development of the so-called Micro and Small Finance (MSF) market in China, meaning financial 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.

The number of MSMEs was increased largely due to the encourage of entrepreneurship and innovation by Chinese government. The newly registered business entity reached 16.51 million in 2016. Banking financial institutions continued to play a leading role in MSMEs finance. We have also observed the fast growth of fintech in China. New cutting-edge technologies such as big data, cloud computing and distributed ledger technology were started to apply in financial sector. In the meantime, the risk of on-line lending was recognized by the regulators, a program to strengthen the regulation and oversight of Internet Finance entities was started in 2016.