Corporatization, listing, and strategic partnering with foreign financial institutions are some of the ways to reach this objective. Further liberalize interest rates. Evidence suggests that further liberalization of interest rates is needed to improve private firms' access to bank loans. Such a measure is not likely to have a significant impact on the borrowing costs of these firms. Most private enterprises that are able to borrow already pay effective interest rates that are significantly higher than the ones prescribed by the central bank.
Entrepreneurs also indicate that access to financing is more important than the cost of funds.
Allow banks to charge transaction fees. Banks find that lending to private companies, most of which are smaller and informationally more opaque than state-owned enterprises, carries higher unit transaction costs. If banks are not in a position to cover these costs, they are likely to discriminate against small firms. Transaction fees would therefore encourage banks to consider more proposals from small firms, develop a more service-oriented culture, and promote greater transparency and better accounting standards. Develop alternatives to bank lending, such as leasing and factoring.