Zhongguancun launched a pilot project that offers microfinance guarantee insurance to small and micro-sized companies on May 27.

Zhongguancun has the most resources in the area of innovation and entrepreneurship. However, small business financing remains a big problem. A large number of start-up enterprises are finding it difficult to get financial support from banks.

According to the statistics of Zhongguancun, less than seven percent of companies with incomes below 100 million yuan ($16.01 million) get loans, and for those with income below 20 million yuan, the percentage reduces to three percent.

The project aims to help high-tech small and micro companies broaden their financing channels. Zhongguancun Administrative Committee will bear the interest subsidy that equals to 20-45 percent of bank loan benchmark interest rates, encouraging insurance companies and banks to provide small loan guarantee insurance for those companies.

Enterprises that can enjoy this guarantee insurance should be high-tech enterprises in Zhongguancun and members of the Zhongguancun Enterprises Credit Promotion Association that continue as a going concern for more than one year with the previous year’s revenue not exceeding 100 million yuan.