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Call for more loans to back rural areas

THIRTEEN domestic lenders, including the Agricultural Bank of China and the Bank of Shanghai, yesterday agreed to lend 65 billion yuan (US$9.5 billion) to support Shanghai's rural economy against the backdrop of a global economic downturn.

The loans will be used in infrastructure projects such as railways, renovating houses and boosting the rural cooperative medical system.

"Financial support is crucial for Shanghai to achieve its target of a 9-percent growth in gross domestic product," said Vice Mayor Tu Guangshao at the signing ceremony yesterday.

He also urged more small-credit firms and village banks to support small businesses, especially in rural areas.

Shanghai has approved the formation of 27 small-credit companies, 17 of which have already started operations.

The city will help these firms to develop their lending system and implement preferential policies to help the industry.

Last month, Chongming County welcomed the city's first village bank which can issue loans within five days for small businesses and three days for rural entities. Shanghai Pudong Development Bank and China Minsheng Banking Corp are also expected to open their outlets in rural areas this year.

Tu also called for more sources of financial support such as private equity and venture capital, and he said the city is preparing for an over-the-counter market which can be another channel for PE and VC.

"As the Shenzhen Stock Exchange prepares for the launch of a growth enterprise board, Shanghai has also applied to set up an over-the-counter stock exchange to serve the Yangtze River Delta region," Tu said.


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