Bank loans to pay for medical treatment are being offered in China for the first time. Shanghai' s Pudong Development Bank (SPDB) officially launched the individual medical loans last week.

So far, they only cover a limited medical treatment at a small number of hospitals, but the bank plans to extend the scheme to other medical conditions and hospitals in the future, China Daily reported on December 21.

The move marks the start of financial institutions' efforts to further tap the city's individual loans market and is being seen as a major breakthrough in this area.

Analysts believe that it will also help increase domestic demand thus fueling the country's economic growth.

The scheme allows an individual in Shanghai to apply for a 2000, 000 (2,400 US dollars) loan from SPDB's Lujiazui branch if they need financial aid to treat eye problems. An agreement has been signed between the bank and three major hospitals in Shanghai, including the No. 7 People's Hospital, Xinhua Hospital and Dongfang Hospital.

"Facing the present fierce market competition, the domestic banking sectors should put more effort into serving the needs of individual customers rather than just enterprise customers," SPDB Vice-governor Huang Jianping said.

Huang said banks should make the most of their own advantages, their good understanding of local markets and comparatively advance retail network, to tap the market, which is set to be very promising as the economy grows.

The bank has already launched many loan projects for individuals this year, including commercial housing loans, car loans, travel-assistance loans, education-assistance loans and loans for study overseas.

Huang said a total of 60 candidates had been granted the overseas education-assistance loans by the end of November.

Some problems still exist, however, Huang said, adding that the application procedures are too complicated due to the banks' fear of possible financial risks. (Xinhua)