The municipal government of Shenyang, Liaoning Province,?plans to offer 44
million yuan (US$5.5 million) in micro-credit loans this year to
assist the unemployed to start their own businesses.
According to the local labor department, individuals with a
preferential certificate for re-employment and servicemen
transferred to civilian work can borrow 20,000 yuan (US$2,500) for
two years from this month.
Residents who have a good credit rating can apply for up to
50,000 yuan (US$6,200), while joint program partners can obtain up
to 200,000 yuan (US$25,000).
Labor scholars see the loan policy as one of the most useful
measures government can offer to assist laid-off workers.
"But most commercial banks are reluctant to grant small loans
because it is time-consuming and often has low profitability," said
Zheng Gongcheng, a professor of Renmin University of China.
In Shenyang, more than 20,000 people each year join the pool of
those seeking work as the city steps up its reform of State-owned
enterprises (SOEs).
This year, the municipal government raised the loan funds, which
means it will be easier for laid-off workers to apply. To obtain
the loans, individuals need to get recommendations from their
communities, examination and approval from the labor department and
a guarantee from a third party.
Most will use the money to run a home business in the service
sector. In order to alleviate unemployment, especially for women
aged in their 40s and men in their 50s who have been laid off, the
municipal government will create 10,000 public positions.
For instance, 2,050 openings will be created for people taking
care of trees, grass and other greenery in the city.
Unemployed women aged between 40 and 45, men aged between 50 and
55, and other disadvantaged groups are eligible to apply for these
jobs.
They will be offered a salary of 450 yuan (US$56) and social
welfare including a pension scheme, medical insurance and
unemployment insurance.
Shenyang aims to keep the urban registered unemployment rate
under 5 percent this year.
(China Daily April 7, 2006)