Shanghai’s Internet Cafe Industry Gains First Financial Support From Bank

The Shanghai Internet Cafe Industry Association and Bank of Hangzhou have reached an agreement to launch a joint guarantee loan program for Internet cafe operators in Shanghai, according to information from the official website of Shanghai Municipal Administration of Culture (Radio), Film & TV.

This program will involve a total working capital loan of CNY150 million. With joint guarantee of three Internet cafe operators, they can apply for the loan. Bank of Hangzhou will set the upper limit of credit in accordance to its related regulations and the loan period will be two years at most.

Those who want to apply for the load can submit their applications to the Shanghai Internet Cafe Industry Association and the association will deliver a unified application to the bank after an initial examination. So far, one unnamed Internet cafe chain operator in the city has applied for the loan.

At present, Shanghai’s Internet cafe industry has entered a stable and orderly development. By the end of 2009, there were 1,475 Internet cafes in the city, with a market scale of nearly CNY2 billion. Over five years’ development, the 13 Internet cafe chain operators, including nine national chain and four local chains, have opened 514 sites, accounting for 34.8% of total Internet cafes in Shanghai.

At the same time, with the strengthened supervision of the government, the social image of Internet cafes has been improved significantly. However, like other cultural enterprises, the development of Internet cafes is blocked by the difficulty in financing. The joint guarantee loan program is the first financial aid measure jointly launched by a banking unit and it aims to further promote the development of the Internet cafe industry in Shanghai.