Social Financing Increment of 9.60 Trillion Yuan in First Two Months; M2 Year-over-Year Growth of 9.0% at End of February

Source: Economic Information Daily Author: Zhang Mo

According to the latest data released by the People’s Bank of China, as of the end of February 2026, the broad money supply (M2) stood at 349.22 trillion yuan, a year-on-year increase of 9.0%. The growth rate remained the same as the previous month and was 2.0 percentage points higher than the same period last year. In January-February, the social financing scale increased by 9.60 trillion yuan, a year-on-year increase of 316.2 billion yuan. During the same period, RMB loans increased by 5.61 trillion yuan.

Industry experts believe that both M2 and social financing scale growth remain at a relatively high level. Meanwhile, credit scale has maintained reasonable growth in the first two months of this year, with more stable and balanced issuance.

“In the first two months of 2026, the cumulative increase in social financing scale was 9.60 trillion yuan, 316.2 billion yuan more than the same period last year, reflecting a moderately loose monetary policy that strongly supports a stable economic start,” said Wen Bin, Chief Economist at China Minsheng Bank. Structurally, government bonds, on-balance-sheet credit, and corporate bonds were the main supports for the social financing scale increase in February. On-balance-sheet credit and bank acceptance bills without discounting mainly drove the year-on-year growth.

Since the beginning of this year, monetary policy has continued to implement a moderately loose stance. Several incremental policy measures involving structural monetary tools were announced at the start of the year. Additionally, liquidity in the banking system remains ample, and social financing conditions are relatively relaxed. On the fiscal side, the newly issued government bonds reached nearly 12 trillion yuan, a record high, with issuance in the first two months growing by 12.2% and 8.5% year-on-year for national and local government bonds, respectively, providing strong support for social financing.

Regarding credit growth, loans have maintained reasonable expansion, and the credit structure continues to optimize. As of the end of February, the balance of RMB loans was 277.52 trillion yuan, up 6.0% year-on-year. In terms of structure, inclusive small and micro loans amounted to 37.31 trillion yuan, an increase of 11.6%; medium- and long-term loans in the service sector excluding real estate reached 60.61 trillion yuan, up 9.8%. All these loan growth rates exceeded the growth of total loans during the same period.

Industry insiders believe that credit issuance in the first two months has been more stable and balanced. The “loan surge” phenomenon in January has eased. Despite the fact that the Spring Festival holiday resulted in three fewer working days in February compared to last year, credit growth in February remained relatively steady.

Meanwhile, loan interest rates remain at historically low levels. In February, the weighted average interest rate for new corporate loans was about 3.1%, approximately 20 basis points lower than the same period last year. The weighted average interest rate for new personal housing loans was also about 3.1%, about 10 basis points lower than last year.

Looking ahead, Wen Bin believes that since March, enterprises have gradually resumed work after the holiday, and financing demand has accelerated. Coupled with the detailed implementation of various policies following the National Two Sessions, and the accelerated start of major projects under the “14th Five-Year Plan,” the demand for supporting financing is expected to grow steadily. The total financial volume is likely to continue its reasonable growth trend.

“From a medium- to long-term perspective, as the economic and financial structures evolve, the proportion of direct financing in social finance is expected to continue increasing. There should be less emphasis on the quantity of credit and more focus on social finance and monetary supply, paying attention to structural changes. Additionally, improving the efficiency of existing funds and optimizing capital allocation will make financial supply and demand more aligned,” Wen Bin said.

(Edited by: Wen Jing)

Keywords: Social Finance