On August 21, the Ministry of Finance, the People's Bank of China, and the National Financial Regulatory Administration jointly released a notice aimed at further refining the coordinated fiscal and monetary policies designed to boost domestic demand. The new directive introduces a broader scope for interest subsidies, additional handling institutions, and increased borrowing limits to better support private investment and consumer spending.
Under the updated framework, newly issued working capital loans extended to eligible small, medium, and micro private enterprises will now be included in the existing loan interest subsidy program. For these loans, the central government will provide an annualized subsidy of one percentage point on the principal, with the support period capped at two years. Additionally, the policy has been expanded to cover newly originated credit card installment products, including dedicated installments, consumption installments, and cash advance installments, which will now qualify for personal consumption loan interest subsidies at the same annualized rate of one percentage point.
The administrative scope for these programs is also being widened. The number of designated handling institutions for the SME loan subsidy and the service industry operating entity loan subsidy will increase to include 21 national banks, along with city commercial banks, rural cooperative financial institutions, private banks, and foreign-funded banks that hold a financial regulatory rating of 3A or above.
Furthermore, the notice raises the borrowing ceilings for eligible entities. The annual loan limit per borrower for the SME interest subsidy at a single institution will rise from 50 million yuan to 75 million yuan. For service industry operating entities, the corresponding cap increases from 10 million yuan to 20 million yuan annually. Individual borrowers will also see their cumulative annual subsidy limit for personal consumption loans and credit card installment business at a single institution rise from 3,000 yuan to 5,000 yuan.
The new measures will take effect on August 1, 2026. Any matters not explicitly covered in this notice will continue to be governed by previously issued regulations on personal consumption loan subsidies and SME loan support policies from the Ministry of Finance, the People's Bank of China, and other relevant departments.
This policy adjustment marks a step forward in strengthening the synergy between fiscal and monetary tools to stabilize economic growth and encourage domestic consumption.