SHANGHAI (Reuters) - China plans to allocate 2 billion yuan ($290.16 million) to a low-tax pilot scheme to bolster small and medium enterprises (SMEs) in urban areas, the official Xinhua news agency said on Tuesday.
SMEs have historically struggled to get financing in China as traditional banks rely less on complex risk assessments and more on securing assets for collateral, which many smaller firms lack.
With recent closures of peer-to-peer lending platforms - which often financed SMEs - smaller firms have found it increasingly difficult to source funds as the economy continues to slide.
The new pilot schemes are overseen by the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the People’s Bank of China and the China Insurance and Banking Regulatory Commission, said Xinhua, citing an anonymous person from the finance ministry.
The schemes will cover 60 cities for three years from 2019 and will help reduce tax and fees for SMEs, Xinhua added.
Reporting by Engen Tham in Shanghai; Editing by Sam Holmes