BEIJING - Lu Xiaoliang, general manager of Lanshan Motor Company Ltd, based in Yuyao city of East China's Zhejiang province, can take a breather now as his cash-strapped company has obtained over 1.8 million yuan ($256,000) through discounted bills.

The small-sized electrical machinery maker raised the money from CITIC Bank, a major commercial lender in China, at an interest rate of 2.75 percent, which largely reduced its financing costs. Having faced cash strains since resuming work in mid-February, it finally solved the fund shortage in the purchase of raw materials, Lu said.

The company's success with raising funds at lower costs came as China has adopted a mix of measures to prop up credit support for the real sector of the economy, especially for small and medium-sized firms.

According to a recent State Council executive meeting, the People's Bank of China (PBOC) has allocated a 300-billion-yuan special re-lending quota, which has so far supported more than 7,000 key enterprises involved in the outbreak response.

Another 500 billion yuan of re-lending and re-discount quota is now supporting an increasing number of micro, small and medium-sized firms to get loans at rates below 4.55 percent, the meeting said.

The latest PBOC data showed that new yuan-denominated loans hit 7.1 trillion yuan in the first quarter (Q1), up 1.29 trillion yuan from the same period last year.

In March alone, the figure amounted to 2.85 trillion yuan, a year-on-year rise of 1.16 trillion yuan.

The Q1 loans were mainly channeled to the real sector of the economy, with 85.1 percent of the total going to enterprises and public institutions, Ruan Jianhong, a PBOC official, told a Friday press briefing.

Since the beginning of 2020, the central bank has offered reasonable and sufficient liquidity to the market through policy toolkits including across-the-board and targeted reserve requirement ratio cuts and open market operations, leading to a drop in market interest, said Dong Ximiao, a researcher with the National Institution for Finance and Development.

At the end of March, the outstanding amount of social financing, a measurement of funds that individuals and non-financial firms receive from the financial system, reached 262.24 trillion yuan, up 11.5 percent year-on-year.

Of the total, 60.6 percent, or 158.82 trillion yuan went to the real economy, up 12.7 percent from the previous year.

Wen Bin, chief researcher with China Minsheng Bank, said the financial sector's capability of supporting the real economy had been continuously enhanced as the country's counter-cyclical adjustments in monetary policy were taking effect.

On the lending cost side, the general loan interest rate had declined by 0.26 percentage points since the beginning of the year, showing that the effects of the monetary policy have been transmitted to the real sector, said another PBOC official Sun Guofeng.

Positive signs also occurred in loans to the consumption sector, which is widely considered crucial to help cope with the fallout of the epidemic and bolster broader economic activities.

In March, newly added consumption loans to individuals stood at 609.4 billion yuan, reversing a net losing streak in February.

However, there are still small and medium-sized firms facing a cash crunch, Dong said, noting that measures should be taken to further stimulate banks' willingness to lend.

With the gradual work resumption of major projects, the Q2 loan demand index was projected to grow 17.1 percentage points from Q1, showed a PBOC survey.

China should step up credit support for major "new infrastructure" and livelihood projects, facilitate consumption upgrading and increase loans to private businesses and small firms, experts said.