In recent years, Bank of China has endeavored to implement state policies and actively probe into the credit extension model - Bank of China Credit Factory (BOC Credit Factory), which is specifically designed for the small and medium enterprises (SMEs), and has made a great progress in the SMEs sector through a comprehensive innovation to the process, technology, management and products. As of the end of May 2011, the total number of customers receiving loans under Bank of China Credit Factory has reached 22,000, and the total loan balance has exceeded RMB 140 billion with the non-performing loans ratio below 0.1%.

The BOC Credit Factory was a result of the joint research and development between Bank of China and the strategic investor Temasek Holdings of Singapore Ltd in 2007. Compared with the traditional service model, it is characterized by the following six innovations: 1, change of customer assessment criteria: in the past, the Bank focused on the size and financial indicators when evaluating small and medium businesses. Now the BOC Credit Factory model has included financial models and non-financial information of the enterprises in its decision making process, sticking to the principle of covering business risks and return risks. 2, change in sales and marketing strategy: instead of waiting for customers to come, the Bank has changed its strategy by conducting market survey to identify target customers, to whom the sales and marketing activities are designed and delivered. 3, change in approval mechanism: it has been changed from the "trinity" model to the professional approval model. 4, change in the post-loan management: from the traditional passive management model that relies on the enterprises' submitted financial information to real-time monitoring with early warning by professional full-time staffs. 5, change in accountability mechanism: exemption from punishment if the duty is fulfilled, and being liable for any negligence. 6, change in the enterprises' credit management, granting credit recovery period to the enterprises that encounter temporary difficulties to help them restore the operations.

Based on the BOC Credit Factory and giving full consideration of the actual needs of different regions and industries, as well as the SME's flexible operational models and diversified financing needs, Bank of China has, after continuous improvement to its financial services, introduced many new service products specifically for the SMEs. With the national strategic policy as the core of its product design, Bank of China has innovatively introduced the Zhongguancun Model that recognizes the capital nature and value in SME's proprietary, core technologies, patents and brands, providing the financial support that covers the entire development cycle for the technology SMEs. It has developed Yiwu Tong Bao products based on local conditions that innovatively take the merchants' booth use right as the pledge for loans, providing credit support for the upgrade and transformation of the merchants in the small commodity city in Yiwu. It has developed Movie and TV Drama Tong Bao products that support the cultural and recreation industries with intellectual property right as pledge for loans. It has intensified services regarding "three agricultural issues" that provide loan support for the agricultural enterprises by allowing cotton, apples, peanuts and other fresh and live produce to be the pledge. It has leveraged the comprehensive business advantages to support the "go global" efforts made by SMEs.

The BOC Credit Factory business has made obvious progress from scratch when it was first introduced two years ago. From 2009 to 2010, the balance of Bank of China SME loans increased by 85%, and the balance of small enterprise loans increased by 211%, respectively 7% and 132% higher than the average loan growth rate of the Bank for the same period. At the same time, the non-performing loans rate for SMEs and small businesses dropped by 4% and 11% respectively.

With Bank of China SME financial service and BOC Credit Factory model gradually recognized by the market and customers, Bank of China's SME financial services won as many as 44 awards in 2010. According to the result of the random customer survey conducted by Ipsos Consulting, the world's second largest market research company, Bank of China SME customers scored a satisfaction rate as high as 92.5% in 2009. The figure reached 94.3% in 2010.