BEIJING - China will set up a state financing guarantee fund of no less than 60 billion yuan ($9.52 billion) to further bolster small businesses and the agricultural sector.

The fund will be created by the Ministry of Finance (MOF) and other departments with the aim of clearing financial hurdles for small and micro businesses in order to serve the real economy.

The move mirrors global precedents in countries such as France, the Republic of Korea, and Japan where state funds play a key role while not seeking profit, according to a statement released by the MOF released on Friday.

The fund is being created at a time when the country's financing guarantee sector remains small, dispersed, and weak with high transaction costs.

It will work through re-guarantees and equity investments to provide financial support for financing guarantee projects backed by local governments.

The MOF estimated that the fund will help around 500,000 small and micro businesses in the next three years, adding about 500 billion yuan of guarantee loans, or one quarter of the nation's total financing guarantee businesses.