Chinese authorities will increase tolerance for non-performing loans at small- and micro- sized companies in an effort to support entrepreneurship and innovation, Xinhua News Agency reported.

The decision was made at a State Council executive meeting chaired by Premier Li Keqiang on Wednesday. The authorities will increase the non-performing loan tolerance rate for small- and micro- sized companies to 3% from 2% and urge financial institutions to reduce their financing rates and costs. Venture capital firms will receive support in financing through bond issuance as well.

The costs for mass entrepreneurship and innovation should also be lowered via more streamlined administration while implementation of tax incentives for research and development accelerate, it said.

“Our efforts in support of business start-ups and innovation have effectively boosted employment and stimulated innovation. Under the current situation, business start-ups and innovation can make a special difference in spurring market vitality and supporting the employment of key groups of people,” Li said.

In the first four months, the number of newly registered businesses was as much as 18,600 a day on average, the report said.