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 rise of 316.2 billion yuan compared to the same period last year. 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 growth in the first two months of this year has been reasonable, with more stable and balanced issuance.

“In the first two months of 2026, the total 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 drivers of the social financing scale increase in February, with on-balance-sheet credit and bank acceptance bills excluding discounts being the main contributors to the year-on-year growth.

Since the beginning of this year, monetary policy has continued to be moderately accommodative. The central bank has introduced multiple incremental policy measures involving structural monetary tools at the start of the year. It also maintains ample liquidity in the banking system, keeping social financing conditions relatively loose. On the fiscal side, the scale of new government bonds issued this year has reached nearly 12 trillion yuan, a record high, with early issuance efforts. In the first two months, the issuance of national and local government bonds increased by 12.2% and 8.5% year-on-year, respectively, providing strong support for social financing.

Regarding credit growth, loan scales have maintained reasonable expansion, and the credit structure continues to optimize. As of the end of February, the balance of all RMB loans was 277.52 trillion yuan, up 6.0% year-on-year. Structurally, 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 growth rates exceeded the overall loan growth rate for 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 newly issued 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 is accelerating. Coupled with the detailed implementation of various policies following the National Two Sessions, major projects under the “14th Five-Year Plan” are speeding up, which is expected to steadily release supporting financing needs. 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 a further shift away from focusing solely on credit volume, paying more attention to social finance and money supply indicators, and emphasizing 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