China Boosts Lending to Tech Start-ups Using Intellectual Property as Collateral

• China is injecting billions into tech start-ups and small companies by using intellectual property as collateral to stimulate loan demand and the economy.
• Intellectual property-pledged financing loans surged 57% in the first half of 2024, reaching Rmb419.9bn, following a 75% increase in 2023.
• The strategy aims to support innovative small companies amid a property sector slowdown and weak local government finances.
• Smaller banks are stepping in to provide loans, recognizing intellectual property as legitimate capital, despite concerns over non-performing loans.
• The policy is also aiding distressed companies in other sectors, with government incentives like interest rate subsidies encouraging banks to issue such loans.

Source: FT