China’s central bank has unveiled a credit-rehabilitation policy to help individuals who defaulted on small loans rebuild their financial standing – part of a broader push to bolster the economy and repair household balance sheets.
The People’s Bank of China said the measure targets borrowers with a single instance of overdue debt incurred between 2020 and 2025 and not exceeding 10,000 yuan (US$1,421). If the debt is fully repaid by March 31, the default record will be hidden from credit reports.
“The policy was introduced to help pandemic-hit borrowers, who are actively repaying their loans, rebuild their credit swiftly,” the PBOC said in a statement on Monday, adding that the move aims to address the Covid-19 pandemic’s…