Banking regulators are encouraging commercial lenders to help develop emerging industries, overhaul credit structures and look for new growth opportunities.

This has involved banks offering innovative financial services like the use of intangible assets as loan collateral, the creation of credit guarantee funds and venture capital loans.

Changzhou Sujing Electronic Material Co., Ltd. has benefited from this program of funding.

The company manufactures thin film materials for semiconductors, flat panel displays and liquid crystal displays, and is based in Changzhou, Jiangsu province.

Sujing Electronic Material obtained a 3 million yuan loan over 12 months from the Jiangnan Rural Commercial Bank Co., Ltd. by using patent rights as collateral.

Another loan of 10 million yuan was agreed by using its trademark as security, while a 5 million yuan loan was put together on a risk sharing mechanism at a favorable monthly lending rate.

"Before using our patent rights as collateral, our company suffered from tight liquidity but had already used our real estate as security," said Hu Qingxiong, chairman of Sujing Electronic Material.

"We tried to borrow from small financial companies but that could only meet short-term demands. In the end, it was the Jiangnan Rural Commercial Bank that helped us and the financing cost was about 40 percent lower than that of small loan companies," Hu added.

Jiangnan Rural Commercial Bank has created a loan program that caters for the different business cycles companies face.

It offers loans to firms to stimulate growth by using their intangible assets as collateral. It also provides loans for mature small and medium-sized enterprises, or SMEs, listed on the New Third Board.

Backed by regulators, financial institutions have been exploring innovative risk-sharing measures with municipal and provincial governments.

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