BEIJING - China's State Council, the country's cabinet, on Friday announced it will set up a national financing guarantee fund in the latest effort to boost financial support to the real economy.

China will speed up development of the financing guarantee industry and deepen reforms in the sector to ease financing difficulties for small- and micro-sized business, as well as the agriculture sector, according to a statement released after the State Council executive meeting presided over by Premier Li Keqiang.

Provinces and cities are encouraged to develop a set of government-led financing guarantee institutions to mainly serve small and micro businesses and agricultural development, said the statement.

The institutions are asked to be more tolerant of risks related to the targeted sectors.

The string of policies came as the government works to channel funding to the real economy, especially to small and micro businesses as banks usually favor big state-backed giants.

Data from the central bank showed Chinese banks made 948.6 billion yuan ($155.5 billion) in new loans to small and micro businesses in the first half of the year, accounting for only 26 percent of total new loans to corporate borrowers in the same period.