WENZHOU in Zhejiang Province plans to open 120 lending companies in the next three years to ease financial difficulties facing small firms, Xinhua news agency reported yesterday, citing the local government.

Wenzhou will develop its financial industry and channel private funds, Xinhua reported. The local government will also increase the number of rural financial institutions to 30 and introduce strategic investors to the Bank of Wenzhou to boost its capital. The measures are being taken after a credit crisis broke out in August, hurting small businesses and private lending, Xinhua said.

More than 80 businessmen in Wenzhou had disappeared, committed suicide or declared bankruptcy to avoid repaying debts to informal lenders since April, Xinhua said at the end of September. Premier Wen Jiabao visited the city last month and pledged to aid small businesses. The central government has unveiled measures for smaller firms.

Wenzhou will promote interest-rate reform, with lenders and borrowers setting rates, Xinhua said.