Wang Xueyuan, a worker at Hangzhou Xinnan Rattan and Bamboo Works Co Ltd, makes a wooden rattan chair for Zara Home in Spain. [Photo by Wang Xihong/For China Daily]

China's State-owned lenders helping finance work recovery of micro and small enterprises from the COVID-19 epidemic

Commercial banks have been ramping up support for small businesses to ensure stable employment and the development of market entities as China takes strong measures to fight COVID-19 and spur economic growth.

The Zhejiang provincial branch of Agricultural Bank of China Ltd, a large State-owned commercial lender, increased the amount of "inclusive loans"－loans to micro and small businesses with a total credit line of up to 10 million yuan ($1.45 million) per borrower－by 70 billion yuan during the first six months.

Apart from increasing inclusive loans, large State-owned commercial banks also significantly cut lending rates for small businesses after these banks were required to strengthen support for small businesses.

Before large banks began reaching out to these clients, city and rural commercial banks offered small business loans at average annual rates of more than 8 percent. By the end of June, however, the weighted average interest rate of one-year loans issued by Agricultural Bank of China's Zhejiang branch to incorporated small businesses was around 4 percent, lower than the average lending rate of the overall banking sector, said Hu Yongzhong, general manager of the inclusive finance department at the branch.