In a bid to create jobs, Shanghai relaxed its threshold for business start-up loans, with a new policy that went into effect yesterday.
According Shanghai human resources and social security bureau's new policy, any Shanghai citizen under 35 can apply for a government-guaranteed one-year loan of up to 100,000 yuan ($14,630), provided a feasible business plan is presented.
"This is the first time the government is giving loan guarantees to business start-ups covering a wide range," an official with the bureau, surnamed Zhang, said.
Two years ago a fund was started in Shanghai to give loans to the best business plans by fresh university graduates, but the number of beneficiaries was limited.
The new policy includes a whole series of favorable measures to help start-up businesses. "Entrepreneurs have to deal with most of the risks in the first three years," a notice from the bureau says.
Any Shanghai native, running a business less than three years old, is qualified to apply for start-up loans. Earlier only businesses under a year old qualified for loans.
The loan amount could be up to 100,000 yuan without collateral security and up to 1 million with a guarantee.
Graduates of a Shanghai university can apply for government-guaranteed business-starting loans, even if they do not have a residence permit, within two years of taking the degree. The idea is to generate employment for the 158,000 students leaving Shanghai's universities in summer. Statistics from the bureau show that a new business can provide an average of six jobs.
In 2008, 7.4 percent population within the working age in Shanghai had their own businesses while 10 percent said they would like to start their own ventures, given a chance.
Source: China Daily