Chinese banks used the government’s new centralised credit scoring system to reject loan applications worth nearly 1 trillion yuan (US$144 billion) last year, the People’s Bank of China reported Friday, showcasing that its deleveraging campaign to reduce high debt and risky lending is succeeding.
In total, 21 banking institutions rejected loan applications worth 911.7 billion yuan (US$131.7 billion) from “high risk” customers, while also receiving alerts on outstanding “high risk” loans worth 1.301 trillion yuan (US$188 billion) and collecting 159.4 billion yuan (US$23 billion) worth of non-performing loans, The People’s Bank of China (PBOC) said. The central bank did not specify whether the loans were from consumers or business clients, although the credit scoring system covers both.