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But even if vetting processes for qualified applicants is made sufficiently stricter, risks remain with regards to the misusage of funds.

According to local newspaper «Henan Daily» (Mandarin only) a Shenzhen-listed firm had borrowed 300 million yuan from Zhongyuan Bank for the production and sale of meat products. This reportedly angered the public not only because the cash-rich company had just bought 1 billion yuan in bank-issued products but also bought 400 million yuan in products one month later issued by the original lender, Zhongyuan Bank, according to an exchange filing.

3. Non-Financial Inefficiencies 

And should all funds be properly appropriated and its usage be well-monitored – a tough feat given the expeditious fashion in which the state hopes to distribute loans – the subsequent non-financial activities still face risk most notably for logistical tasks. 

Such concerns in China’s relief efforts were spotlighted in early February when the Red Cross Society of Hubei was under fire for logistical failures that led desperate hospitals to seek help online for donations of protective equipment. The issue sparked online rage and three officials from the charity organization’s provincial branch were disciplined in late February.