Private lenders will test the waters of financial reform

Help may be at hand for cash-strapped small firms as regulators approve the establishment of banks backed by entrepreneurs, reports He Wei from Shanghai

For the first time in almost two decades, the nation's banking sector is set to get an infusion of private capital with the foundation of five institutions to be formed by entrepreneurs.

Regulators hope these new banks will provide more financing for cash-starved small companies and more competition for mammoth State-owned banks.