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December 14, 2009

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Home » Business » Finance

VC body set up to fund small businesses

A venture capital foundation aiming to raise money for China's small businesses was launched over the weekend to help relieve their financing hardships.

The China Association of Small and Medium Enterprises and the Shenzhen Junsheng Capital, a leading private equity and asset management company, will jointly operate the foundation.

Initially, the fund aims to raise 1 billion yuan (US$147 million), with 2 billion yuan more to be collected after the road show is completed, said Li Zibin, chairman of the association.

The money will be raised through private offering. Subscriptions should be not less than 50 million yuan, Li said.

The foundation will help push private capital to finance the growth of small businesses, said Wang Liming, head of the small business department of the Ministry of Industry and Information Technology.

Li said the initial fund is expected to come from some government agencies such as the Ministry of Finance and Ministry of Science and Technology. Banks, insurance and securities companies are also invited to join in.

Small businesses in China have suffered limited financing sources as the nation's commercial lenders preferred to lend to state-owned enterprises and large key projects.


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