China has launched a multi-billion dollar credit guarantee fund to aid the channelling of funds to cash-starved sectors of the economy, Caixin reports.
The National Financing Guarantee Fund will kick off with starting capital of Rmb 66.1 billion ($9.7 billion). The country’s Ministry of Finance is the fund’s largest shareholder with a 45% stake, with the remaining stakes distributed among 20 state financial institutions.
The fund is part of Beijing’s wider scheme to open more financing channels to small businesses, agriculture and innovative industries by using gains from equity investments to offer guarantees for loans. China’s State Council has estimated that the fund will provide guarantees on over Rmb 500 billion of loans over the next years.