On September 17, China Financing Guarantee Association (CFGA) was officially established in Beijing with the approval of the Ministry of Civil Affairs. Mr. Yan Qingmin, Vice Chairman of the CBRC, attended the founding ceremony and delivered a speech.

Vice Chairman Yan pointed out that the development of China’s financing guarantee industry must be standardized, with self-discipline as the crucial approach. The establishment of CFGA is the symbol of maturity and standardized development of China’s financing guarantee industry.

Mr. Yan emphasized that high-quality service is at the top of CFGA’s agenda. He said that we must make efforts in research, service coordination, education, training and self-development. The key for financing guarantee institutions to achieve healthy and sustainable development is to strengthen standardization and supervision, improve internal control and management, and provide professional, specialized and high-quality services. In this way, financing guarantee institutions can serve as the backbone for small- and micro-sized enterprises.

China’s guarantee industry, among all the twists and turns, now has entered its 20th year. During its fast development, some problems occurred, such as excessive number of institutions and illegal operations. In 2009, the State Council held the inter-ministerial joint meeting on the supervision of financing guarantee business, which incorporated the financing guarantee industry into the supervisory system.

A series of rules and regulations have been implemented and steady progress has been made in work related to standardization and risk inspection. By the end of 2012, there are 8,590 legal entities in the financial guarantee industry in China, with 15,414 financial institutions in the banking sector conducting business with them. The balance of financing guarantee loans reached 1.4596 trillion RMB. The financing guarantee industry, on the whole, enjoys sound and smooth development and plays a vital role in financing small- and micro-sized enterprises and developing local economies.

The establishment of CFGA will promote the overall development in the industry. According to Vice Chairman Yan, we must have self-discipline instead of mandatory supervision, conduct orderly cooperation instead of disordered competition, and promote standardized and healthy development of the industry. We should give full play to the advantages of the industry, enhance service coordination, explore new models and mechanisms for the cooperation between banks and financing guarantee institutions, so as to push forward the transformation of the development model of the industry.