The People's Bank of China along with other five government departments issued a notice on Monday to give grace period to small and micro enterprises on loan payments to ease their financial pressure.

The departments issued the notice to encourage banks and financial institutions to take market-oriented approaches to strengthen financial support for these smaller companies.

Specifically, the notice said that if these companies encounter difficulties in paying back their loans due in the fourth quarter of 2022 due to the COVID-19 pandemic disruptions, banks should in principle extend their principal and interest repayment to June 30, 2023.

China has launched various policies and measures to shore up small firms including tax rebates, fee reductions and postponement of social security premium payments during the pandemic.

Read more: China speeds up tax refund to help small companies through hardship