An article appearing in the official party mouthpiece People's Daily on Tuesday named companies that have been approved to participate in the pilot project, including e-commerce giants Alibaba and Tencent - both of which have been competing to market high-yielding wealth management products online.
A total of 10 companies will participate in the pilot, the report said, adding that five privately owned banks will be approved as the first batch. It did not give names of these banks.
Alibaba is applying for the licence through its affiliated Small and Microfinancial Services Group, which includes online payment unit Alipay as well as its shareholding in Alibaba's micro-finance unit, Zhongan Insurance, and Tianhong Asset Management Co.
"The Small and Micro Financial Services Group will apply for the license together with China Wanxiang Holding Co., Ltd; we are currently preparing the relevant application materials so have no further information to share at this time," an Alibaba Small and Micro Financial Services Group spokeswoman told Reuters via email.
Wanxiang Holding is part of Hangzhou-based Wanxiang Group, China's biggest auto parts company built by billionaire Lu Guanqiu.
Tencent was not available for immediate comment.
Economists have long decried the tendency of China's state-dominated banking system to grant loans primarily to large state-owned firms, even as SMEs account for 60 percent of gross domestic product and around 75 percent of new jobs.
But banks and officials warn that even if regulators move aggressively to permit new, privately owned banks, it won't provide an immediate solution to SME financing.
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