China’s central bank has lifted its re-lending quota by 50 billion yuan ($7.25 billion) to boost financial support for small and private businesses and support economic growth.
The move came after China’s top leadership vowed to encourage financial institutions to increase medium-and long-term financing to manufacturing companies and private firms at a key meeting held on Tuesday.
The re-lending quota will be granted to five types of local financial institutions－city commercial banks, rural commercial banks, rural cooperative banks, village banks and private banks, the People’s Bank of China said in a statement on Wednesday.
The decision was seen by analysts as a direct response to the central leadership’s order to solve the persisting problems of credit shortage and high financing costs for small and private businesses.
Since the beginning of this year, the central bank has enhanced financial support for small businesses, with outstanding re-lending loans reaching 226.7 billion yuan by the end of June. After the increase, the country’s re-lending quota supporting small firms amounted to 369.5 billion yuan.
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