Tang Jie talks about many of the problems and difficulties that he faces managing the application process. First, many people are too discouraged to even apply for this loan due to the fact that it is a government sponsored program. This is because they believe that the process will be too bureaucratic and burdensome – a notion that has arisen from the difficulty of borrowing from other formal financial channels such as from the Big Four banks.

Second, Tang Jie talks about the homogeneity of the loan applicants’ businesses. He speaks of the need to diversify the businesses supported by the loans because most of these businesses serve the local market exclusively, which means that too many similar businesses, such as pig farming, will end up competing too fiercely with each other over market share and drive down profits. This will have a negative impact on their business development and ability to repay loans.

Another problem that Tang Jie cites is that many of the people who apply for loans do not really need them. That is to say, giving them the money does not dramatically help them because their enterprises already have a good amount of cashflow and credit. Those really grassroots startups that really need the seed money do not come to them for funding. This is due to many reasons not the least of which is the general distrust and disillusionment towards the government. Since this fund is a government program, people instinctively think that there will be a lot of hassle trying to secure a loan. However, the reality is that the loan process is a lot simpler when compared to say, a bank or credit cooperative.