The State Council issued a circular on Feb 14, outlining plans to promote government-managed, financing guarantee institutions.
The plans are aimed at channeling more financial resources to small and micro companies, as well as rural households and new agricultural operators.
According to the circular, supporting the development of small and micro companies, as well as agricultural and rural development, will be the primary work of all government-managed, financing guarantee and re-guarantee institutions.
Government-managed guarantee and re-guarantee institutions will be run at lower profit margins to help reduce financing costs for their clients.
The policy is targeted to help privately owned enterprises, individual businesses, rural households, and new agricultural operators, as well as strategically emerging industries.
Companies and entities applying for guarantees of no more than 5 million yuan will be prioritized.
The circular said government-managed, financing guarantee institutions should play a greater role in expanding the guarantee businesses of small and micro companies, as well as agricultural and rural development organizations.
Guarantee amounts allocated to them should account for over 80 percent of the whole guarantee business, and guarantee projects of no more than 5 million yuan should account for over half.
It also said that re-guarantee fees will be further decreased, and cooperative institutions will be encouraged to cut the average guarantee rate to lower than one percent.