China has launched its first national guarantee fund aimed at funnelling capital to small businesses, Caixin reports. The move is part of Beijing’s wider goals for financial restructuring to support the real economy.
The RMB 66.1 billion ($9.6 billion) fund was signed into effect on Wednesday by a group of 20 institutions including state banks and government bureaus. The goal of the fund will be to increase access to financing for small and micro enterprises, and the agriculture sector – areas that have historically been neglected by lenders.
The fund will guarantee around RMB 500 billion in loans over the next three years, according to the finance ministry. This is equivalent to around one-quarter of total financial guarantees in China.