Wang Zhiyong, the founder of a Shanghai-based gift card company, tried twice to get a bank loan for his business and failed both times.
So Wang turned to China's vast network of alternative lenders, opting for a so called "curb side" loan. Such a loan is just one segment of the country's shadow banking system, which includes pawn shops, credit guarantee firms, trust companies and other mechanisms as sources of funds for Chinese borrowers.
"Banks never lend a hand to start-ups like us," said Wang, 40. "They only go after big companies and state-owned firms."
The dearth of bank credit available to China's millions of small to mid-sized companies is expected to tighten as authorities seek to rebalance the world's second-biggest economy.
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The central bank briefly allowed short-term interbank rates to surge last month to crack down on lending tied to property speculation and bloated local government debt.
The crackdown, however, only reinforced the dependency of many of China's non-state backed enterprises on the shadow banking industry.
Fitch says some 36 percent of outstanding credit in China, or 34 trillion yuan ($5.55 trillion), lies outside banks' loan portfolios, a huge pool of money which market participants find difficult to track and which could cause an ugly credit mess in a steeper slowdown.
Beijing now faces the difficult task of trying to re-direct a non-bank financing system - created by the government's own lending policies - that has helped keep its economy humming.
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"Shadow banking activities have increased because China needs growth, and the banking sector has to a significant degree failed in its role of financial intermediary," Credit Suisse said in a February research note.
For Wang, the greeting card company founder, tapping the shadow banking industry was his only option, given that banks usually do not lend to small enterprises and the stock and bond markets in China are virtually shut.
He received a 5 million yuan, six-month loan from the curb side lender, which charged him an annualized interest rate of 14 percent, or about twice as much as a bank loan.