SHANGHAI, Nov 24: A Chinese industry association for small and medium-sized businesses said on Monday it plans to establish a three-billion-yuan ($440 million) venture capital fund for its members.

The fund is part of efforts to help small businesses weather the financial crisis along with establishing a bank dedicated to small and medium-sized businesses, the association said in a statement. The fund will be established by the year-end and money will be raised through private equity, according to the China Association of Small and Medium Enterprises’ website.

Industrial companies with sales revenue of up to 300 million yuan would be eligible for assistance from the fund and the bank, the head of the association Li Zibin told the official Xinhua news agency.

Difficulty in raising capital has been a major threat to the small and medium sized businesses’ survival, he was cited as saying.

About 67,000 small and medium sized companies with sales exceeding 5 million yuan closed down in the first half of 2008 due to the economic slowdown and a tight monetary policy, Xinhua reported, citing statistics from the National Development and Reform Committee. —AFP