(Yicai Global) July 25 -- The government of Chengdu plans to provide small- and medium-sized companies in the cultural and creative fields with loans of up to CNY10 million (USD1.5 million) each as it bids to turn the city into a renowned cultural and creative center, The Paper reported.

The municipal government yesterday held a press briefing for cooperation projects between the cultural and creative sector and the finance industry. It will launch the loan products, with support from the city's finance department, providing up to CNY10 million to each company and low-cost loans of up to CNY3 million for corporate or actual controllers for a maximum period of three years.

The government will provide a 40-percent discount to the firms and bear 60 percent of the guarantee costs. It will also set up a CNY100 million risk compensation fund to for the loans.

Chengdu became the capital of China's southwestern Sichuan province in 367 BCE and is one of the top 10 ancient capitals in the country. It is home to many well-known historical sites, including the Dujiangyan irrigation system and Wuhou Temple, and its giant panda also attracts thousands of tourists every year.

In China, the cultural and creative sector covers eight categories: film, television and media; creative design; modern fashion; music and art; culture, sports and tourism; information services; exhibitions; and educational consulting. SMEs in these fields can all apply for the loans, according to the Chengdu authorities.

The cultural and creative fields have small assets and rapid growth, in which companies have difficulties in applying for loans in their early stage of development because of small mortgage assets and insufficient guarantee conditions, according to Shi Jiang, deputy director of the Chengdu publicity department. As their financing costs are large, the new loans will effectively solve these problems, Shi added.

Chengdu rolled out 74 cultural and creative projects last year, spanning a total area of 2.8 million square meters and adding CNY112.9 billion to the local economy, or 7.2 percent of the regional gross domestic product. The city plans to raise that to CNY260 billion by 2022, making up 12 percent of regional GDP, data shows.