China is promoting local government bonds to retail investors as part of a pilot program to sell local bonds over the counter at commercial banks.

Six cities and provinces, including Beijing, Ningbo city in Zhejiang province, Zhejiang province, Sichuan province, Shanxi province and Shandong province, are in the first batch to participate in the pilot program.

The Chinese finance ministry announced the plan to allow qualified retail investors to buy local government bonds over the counter in November 2018. Such bonds were mostly sold to financial institutions before.

The Zhejiang provincial finance department began to issue 1.1 billion yuan (US$ 163 million) in five-year bonds on Monday for five shanty area innovation programs.

The bonds are expected to carry interest rates between 3.12% to 3.36% and the final coupon will be announced on March 22, depending on market conditions and investor interest. To spark interest for all investors, minimum investment is as low as 100 yuan.

Ningbo and Beijing have also reportedly started to sell such bonds.