China launched a yearlong program Monday to subsidize household consumer loans, part of a nationwide effort to cut borrowing costs and spur spending as policymakers seek to revive demand, reports Caixin. Under the plan, announced by the Ministry of Finance and two other agencies, residents who take out loans at 24 designated financial institutions will receive a 1 percentage point interest subsidy from Sept. 1, 2025, through Aug. 31, 2026. The policy excludes credit cards and is limited to loans that can be verified as used for consumption.
Eligible spending includes loans under RMB 50,000 ($6,870) for general consumption, and larger-ticket purchases such as automobiles, elder care, education, tourism, home renovations, electronics and medical services.
The subsidy rate is capped at 1% annually and cannot exceed 50% of the contracted loan interest rate. Each borrower may claim a maximum subsidy of RMB 3,000 ($410) during the program, with a RMB 1,000 limit on small-ticket loans under RMB 50,000.