BEIJING, October 21, SinoCast -- The People's Bank of China (PBC), the country's central bank, has recently encouraged some commercial banks to devote themselves to supporting the microfinance and financing schemes of the domestic SMEs (small and medium enterprises).

Several days ago, Wen Jiabao, premier of the State Council, emphasized that the nation should further improve the microcredit guarantee system, stimulate more financial institutions to microfinance, broaden SMEs' direct financing channels, as well as finance the technical innovation of SMEs in the fourth quarter of 2008 and even the near future.

In order to give a stronger support to microfinance, agriculture-involved loan, and construction of the earthquake disaster areas, the PBC in August enlarged the credit limit for the first time. A batch of small- and medium-sized financial organizations, especially the city commercial lenders, benefit a lot from this adjustment.

However, there is still the conflict between SMEs' credit demand and the loan supply of commercial banks, chiefly due to the financial crisis worldwide, said people close to the matter.