WENZHOU, Zhejiang — The first private bank in the Chinese mainland opened for business in coastal Wenzhou city, East China’s Zhejiang province on March 26.

The Wenzhou Minshang Bank announced its ambition to target niche markets to offer inclusive financial services for small businesses, the self-employed, community residents, and county-level rural sector.

The bank completed its first credit service on March 26, issuing a 300,000 yuan ($48,289) loan to Jiangda Electronic Co Ltd, a small electronics and aluminum foil producer.

Ma Ziguang, general manager of Jiangda Electric Co Ltd, told Xinhua his company, which focuses on export, often lacks capital.

“The bank’s easily-applied loan service is swift and handy,” he said adding the loan was given without any mortgage as the lender values the company’s production performance and reputation.

The bank’s main sponsors are electronic equipment producer Chint Group, industrial chemical maker Huafon Group as well 11 other large share holders, which include industrial firms, clothing manufacturers, real estate and high-tech firms. It was among the first three private banks approved by the China Banking Regulatory Commission (CBRC) in July last year.

According to the Wenzhou subsidiary of CBRC, the government has set up a very high “threshold” for approving the first private banks, taking in full consideration for share holders’ competitiveness, brand image and credit.

All the share holders are leaders in their respective fields and have corporate assets worth tens of billions of yuan.

Nan Cunhui, chairman of the bank’s biggest share holder Chint, acts as the bank’s chairman.

“Banks carry more social responsibility than other businesses. Facing competition from heavy-weight state-owned banks, Wenzhou Minshang Bank must provide differentiated financial services which should be more flexible, efficient and considerate,” he said.

Nan said the bank will mainly target small enterprises and community customers who need convenient and comprehensive financial services.

The bank’s governor, Hou Niandong, was a former deputy governor of the Zhejiang Provincial Branch of the Industrial and Commerce Bank of China, which is China’s largest commercial bank by assets.

Hou said there are 15,000 small businesses involved in the production chain of the bank’s 13 share holders.

“They are our first batch of potential customers to keep deposit accounts in the bank, which could shape up the bank’s ‘capital pool’ and capital flow,” he said.

CBRC’s approval of private banks, including two that are preparing to open — Shanghai Huarui Bank Co Ltd and the Shenzhen-based Webank, which was partly funded by Chinese Internet giant Tencent — is seen as China’s “ice-breaking” reform set up to dismantle the de facto monopoly by state-owned banks.

The city of Wenzhou is famous for its private entrepreneurship and manufactured exports. Bad loans, however, began to rise after the city’s private lending activities collapsed in 2011, forcing local businesses to go bankrupt and some entrepreneurs to commit suicide or flee. Companies here are in dire need of financial support.

This has become a driving force to push the government to think of ways to pilot financing reforms and channel money back to the real economy.

Miao Xinhao, deputy director of Wenzhou Financial Institute, said private banks set up with private funds are more viable in market competition and responsible for their own risks. The private sector will stimulate the state-owned banks to reform their system and services for survival.