The country's farmers and small firms can now receive support through loans as the People's Bank of China (PBOC) announced that it will expand and promote its relending pilot scheme to include the most vulnerable sectors of the country's economy, Shanghai Daily reported.
According to the report, the scheme was first introduced in the provinces of Guangdong and Shandong in 2014, which allows banks to refinance high-quality credit assets rated by the central bank.
The report said that a total of 4.97 billion yuan ($756 million) has been relent by the People's Bank of China to 31 institutions since the program started until the end of 2015.
The PBOC said it would expand the relending scheme to include 11 provinces and cities to help lower borrowing costs for the real economy.
The central bank had rated bank loans made to 3,022 companies, which enabled the banks to use their high-quality credit assets to secure relending, the report said.
Last year, media reports said that the central bank's move to expand the relending pilot scheme is a kind of Chinese quantitative easing (QE) which may result to 7 trillion yuan being injected into the economy.
Ma Kunpeng, an analyst with Sinolink Securities, said though that the central bank's latest move should neither be read as the Chinese version of quantitative easing (QE) nor a strong stimulus. He said the move was aimed at making more efficient use of credit assets and has only limited or short impact on the Chinese economy.
Li Qilin, an analyst with China's Minsheng Securities, said the lending program would provide a new tool to support the economy.
"Through this pilot, the PBOC can directly support some new growth engines, like the small and medium companies, which are dynamic but usually cash-strapped, by offering favorable discount rates and interest rates when granting credit asset-pledged loans," Li said.