People's Bank of China approved Lishui city in eastern Zhejiang province as a pilot for rural financial reform, making it the first place in the nation allowed by the central bank to conduct such an experiment.

In a statement published on Thursday on the website of the PBOC, the bank said it has approved the application of Lishui government to explore rural financial reform. The request was filed last September.

The exploration should be conducted in accordance with the Overall Plan of the Lishui Rural Financial Reform, jointly worked out by the PBOC and the Lishui government, according to the statement.

Issues that are "significantly innovative" should get approved by PBOC on a case-by-case basis, according to the statement.

The Overall Plan said the government would accelerate the development of village and town banks, companies offering small loans and financial mutual-aid societies.

Nongovernmental funds are welcomed. Various small and medium-sized financial organizations such as community banks, financial leasing companies and pawnbrokers are encouraged where conditions are mature, according to the Overall Plan.

The plan also encouraged innovation in rural financial products.

zhengyangpeng@chinadaily.com.cn