Families in China borrowed RMB8.6tn in private loans: survey
July 16, 2013 Leave a comment
Families in China borrowed RMB8.6tn in private loans: survey
Liang Shih-huang and Staff Reporter
2013-07-14
According to the China Household Finance Survey conducted by the Southwestern University of Finance and Economics in Chengdu, some 33.5% of Chinese families have taken private loans totaling 8.6 trillion yuan (US$1.4 trillion). Half of these loans were used to buy houses, and people who made less money borrowed more in private loans. The survey was China’s first large-scale study of the financial situation in Chinese households. In 2011, the university began conducting a biennial nationwide survey, which involved household information, debts, income and expenditure.The results of the survey indicated that the rate of participation in the financial market among Chinese families was apparently low, at 13%. Some 8.8% of households had invested in the stock market, while 6.8% invested in funds. Some families took out loans to buy vehicles or support the education of a family member.
The survey also discovered that many medium and low-income households have relied on private loans to make ends meet. Households with lower incomes appear to have borrowed more in private loans. The figures also indicated that families had average assets worth 61,439 yuan (US$10,008) per household and an average debt of 60,959 yuan (US$9,930).
The survey noted that the low rate of participation in the financial market could be attributed to their lack of knowledge of financial markets, low income levels and savings, and the underdevelopment of the country’s financial market, which has failed to meet the needs of ordinary families.
Of the 8.6 trillion yuan (US$1.4 trillion) borrowed in the private lending market, 3.8 trillion (US$620 billion) was used to buy houses while another 3 trillion yuan (US$490 billion) was used for agricultural and industrial businesses.
The survey center stated that most families had resorted to the private lending market because they were unable to obtain loans from banks
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