Three of China’s largest state-owned banks have agreed to invest billions of yuan into a government-managed fund aimed at channelling liquidity to small enterprises and agricultural companies, as Beijing tries to balance deleveraging in certain sectors of the economy with bolstering economic growth.
Industrial and Commercial Bank of China, Bank of China, and Agricultural Bank of China will each contribute Rmb 3 billion ($442.6 million) over four years into the National Financing Guarantee Fund (NFGF), Caixin reports, with payments commencing later this year.
The fund was first proposed in 2015, but an official statement from the State Council was made only in March of this year. In the original mission statement, the fund outlines its goal as cutting funding costs and increase credit access for small companies and those tied to the agricultural sector. The fund will invest in equities and offer guarantees, according to Caixin.