Smaller enterprises which have trouble getting finance are expected to get better access to loans as new institutions are set up to meet their needs, the China Banking Regulatory Commission (CBRC) said last week.

The new financial institutions would offer better financial support for smaller enterprises to avoid widespread bankruptcies and massive lay-offs, the CBRC said.

It said these smaller companies were less proficient at handling risk, especially amid the financial turmoil now affecting China.

The institutions would be established by commercial banks as a quasi-corporate body or subsidiary that would run independently, it said.

The commission said smaller enterprises were identified as those with an authorized credit of 5 million yuan (about US$720,000), assets of less than 10 million yuan or annual sales of less than 30 million yuan.

However, these standards only applied to document filing, and banks could set other definitions.

China's small and medium-sized enterprises, largely labor-intensive and vulnerable to fluctuations in demand, are affected most by the current global financial crisis.

In the first half of 2008, 67,000 such companies, each with a business volume exceeding 5 million yuan, closed and laid off more than 20 million employees, the National Development and Reform Commission said.

(Xinhua News Agency December 8, 2008)