Special Report: Global Financial Crisis

    BEIJING, Feb. 24 -- Chinese lenders have been urged to be flexible and innovative about loan repayments by smaller firms, such as extending loan periods.

    The China Banking Regulatory Commission said Friday such moves are aimed at solving the financing difficulties of small firms.

    According to a notice to lenders, banks and small firms could put terms in loan contracts that allow the borrower to ask for a new credit assessment before the loan is due.

    If no problems are found, the borrower could extend the loan period without starting all over again by signing a new contract. Any extra conditions for extensions could be negotiated by both parties, the commission said.

    The commission also ordered lenders to step up risk management on extended loans and monitor use of the loans to prevent the funds from going into restricted projects or being embezzled.

    Xinhua News Agency correspondents reporting from Beijing.

    (Source: XHTV)