The "national subsidy" for consumer loans has arrived, with ABC, PSBC, Guangfa, Pudong Development Bank, and Zheshang actively promoting it

On July 31, the State Council's executive meeting deployed the implementation of personal consumption loan interest subsidy policies and service industry operating entity loan interest subsidy policies.

On August 12, to implement the decisions and deployments of the Central Committee of the Communist Party of China and the State Council to vigorously boost consumption and comprehensively expand domestic demand, the Ministry of Finance and nine other departments issued the "Implementation Plan for Loan Interest Subsidities for Service Industry Operating Entities" (hereinafter referred to as the "Entity Subsidy Plan").

On the same day, the Ministry of Finance, the People's Bank of China, and the Financial Regulatory Administration jointly issued the "Implementation Plan for Fiscal Interest Subsidies for Personal Consumption Loans" (hereinafter referred to as the "Personal Subsidy Plan").

In particular, the latter has sparked much discussion and is affectionately regarded by many as a "national subsidy" for consumer loans.

The plan specifies that the loan handling institutions include six large state-owned commercial banks that are national or cross-regional, twelve national joint-stock commercial banks, and five relatively large consumer finance companies, among other personal consumption loan issuing institutions.

On August 12, Agricultural Bank of China, Postal Savings Bank of China, Guangfa Bank, Shanghai Pudong Development Bank, and Zhejiang Commercial Bank announced their plans to promote personal consumption loan interest subsidy work.

Directly Benefiting Individual Consumers

According to a relevant official from the Ministry of Finance responding to reporters' questions, the newly introduced fiscal interest subsidy policy for personal consumption loans has four major characteristics in its policy design:

First, it directly benefits individual consumers. Unlike previous interest subsidy policies that focused on supporting the investment and supply sides, this personal consumption loan fiscal interest subsidy policy targets the demand side, directly benefiting individual consumers by reducing the cost of personal consumption loans. The subsidy funds are directly deducted by the relevant loan handling institutions when charging interest to borrowers, enhancing consumers' sense of happiness and gain. In terms of supported groups, it relies on the differentiated customer base of commercial banks and consumer finance companies, widely covering various groups such as wage earners and flexible employment personnel, thereby enhancing the inclusiveness of the policy.

Second, it is close to residents' actual consumption needs. The personal consumption loan fiscal interest subsidy policy supports the portion of personal consumption loans actually used for consumption during the policy execution period, covering a wide range of daily living expenses such as "clothing, food, housing, and transportation," as well as key areas of consumption closely related to residents' lives, such as household vehicles, elderly care, childbirth, education and training, cultural tourism, home decoration, electronic products, and health care. This is conducive to meeting the diversified and multi-level consumption needs of the people and better supporting them in enjoying more convenient, rich, and high-quality goods and services.

Third, it adheres to market-oriented and rule-of-law operations. The plan clearly requires loan handling institutions to conduct credit review and post-loan management in accordance with market-oriented and rule-of-law principles while supporting the boost and expansion of consumption. It mandates the implementation of personal consumption loan interest rate policies, strict adherence to relevant regulations on the supervision and management of personal consumption loans, and prohibits inducing residents to borrow under the guise of policy introduction; it also requires reasonable setting of consumption loan limits, terms, and interest rates, proper identification of borrowers' identities and consumption information, and effective strengthening of the control of credit fund usage and risks to prevent diversion to non-consumption areas and misappropriation of subsidy funds Fourth, focus on strengthening departmental collaboration. To promote the efficient and standardized implementation of policies, the "Plan" implements full-process management for fiscal interest subsidies on personal consumption loans, clearly defining the responsibilities of the Ministry of Finance, the People's Bank of China, the Financial Regulatory Administration, as well as local regulatory bureaus of the Ministry of Finance, local financial departments, and financial regulatory bureaus. It specifies the work processes for applying, reviewing, and disbursing interest subsidy funds, and incorporates the policy execution status of loan handling institutions into the daily supervision of financial regulatory departments to ensure the effectiveness of policy implementation.

What are the key areas for interest subsidies?

From September 1, 2025, to August 31, 2026, residents using personal consumption loans (excluding credit card business) issued by loan handling institutions for actual consumption, and where the loan handling institutions can identify relevant consumption transaction information of borrowers through loan issuance accounts, can enjoy interest subsidy policies as stipulated.

The scope of interest subsidies includes consumption below 50,000 yuan per transaction, as well as consumption in key areas such as household vehicles, elderly care and childbirth, education and training, cultural tourism, home decoration, electronic products, and health care for transactions of 50,000 yuan and above (see the chart below for details). For consumption above 50,000 yuan per transaction, the interest subsidy will be capped at the consumption amount of 50,000 yuan. After the policy expires, the extension of the policy period and the expansion of the support scope may be studied based on the implementation effects.

The interest subsidy rate is 1% per annum

In terms of interest subsidy standards, the annual interest subsidy rate is 1 percentage point (calculated based on the principal of personal consumption loans actually used for consumption that meet the conditions), and it does not exceed 50% of the loan contract interest rate. The central government and provincial governments will bear 90% and 10% of the interest subsidy funds, respectively.

This interest subsidy rate is roughly equivalent to one-third of the current personal consumption loan interest rate level of commercial banks.

The loan contract interest rate must comply with the corresponding interest rate self-discipline agreements. During the policy implementation period, the total interest subsidy limit for each borrower at one loan handling institution is 3,000 yuan (corresponding to a cumulative consumption amount of 300,000 yuan), of which the cumulative interest subsidy limit for personal consumption loans below 50,000 yuan at one loan handling institution is 1,000 yuan (corresponding to a cumulative consumption amount of 100,000 yuan).

Banks respond positively

Regarding loan handling institutions, the "Plan" specifies that the loan handling institutions include six large state-owned commercial banks that are national or cross-regional, twelve national joint-stock commercial banks, and five relatively large consumer finance companies, among other personal consumption loan issuing institutions. At the same time, to expand the coverage of the policy, local financial departments are encouraged to provide fiscal interest subsidy support to other financial institutions engaged in personal consumption loan business based on actual conditions.

The six large state-owned commercial banks include Industrial and Commercial Bank of China Limited, Agricultural Bank of China Limited, Bank of China Limited, China Construction Bank Limited, Bank of Communications Limited, and Postal Savings Bank of China Limited 12 national joint-stock commercial banks, including CITIC Bank Corporation Limited, China Everbright Bank Corporation Limited, Huaxia Bank Corporation Limited, China Minsheng Banking Corporation Limited, China Merchants Bank Corporation Limited, Industrial Bank Co., Ltd., Guangfa Bank Co., Ltd., Ping An Bank Co., Ltd., Shanghai Pudong Development Bank Co., Ltd., Hengfeng Bank Co., Ltd., Zhejiang Commercial Bank Co., Ltd., Bohai Bank Co., Ltd.

5 other personal consumer loan issuing institutions, including Shenzhen Qianhai WeBank Co., Ltd., Chongqing Ant Consumer Finance Co., Ltd., China Merchants Union Consumer Finance Co., Ltd., Industrial Consumer Finance Co., Ltd., Bank of China Consumer Finance Co., Ltd.

On August 12, Agricultural Bank of China, Postal Savings Bank of China, Guangfa Bank, Shanghai Pudong Development Bank, Zhejiang Commercial Bank, and others announced the promotion of personal consumer loan interest subsidy work.

Previously, on July 31, the State Council's executive meeting deployed the implementation of personal consumer loan interest subsidy policies and service industry operating entity loan interest subsidy policies. After that, Industrial and Commercial Bank of China, China Construction Bank, and Bank of Communications have also successively expressed their intention to actively respond to relevant policies to support consumption upgrades and the revitalization of the service industry.

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