Credit Data, Banks, “Packaging Agencies” and the Promise of Digital Lending to Small Businesses in China

Micro, small and medium-sized enterprises (MSMEs) in China often struggle to secure loan financing. In response, the government has required banks to increase credit for MSMEs and incorporate digital technologies into traditional credit evaluation models. In 2018, the state introduced “credit easy loan” digital lending platforms under its social credit system to facilitate collateral-free loans for MSMEs in a bid to enhance financial inclusion and social trust. Meanwhile, the actual implementation of these initiatives remains understudied. Drawing on six months of ethnographic fieldwork, this paper examines how “packaging agencies” act as intermediaries in preparing and “beautifying” bank loan applications. These agencies may manipulate credit data and leverage close relationships (guanxi) to help clients obtain loans, while banks may tacitly approve their practices to fulfil their financial inclusion requirements. Through such processes and in a supposedly digitalized system, a single MSME loan multiplied into ten loans, large companies became small businesses, and one housewife became a creditworthy microentrepreneur.