The loan worth 330 million yuan ($46 million) to a state-backed development was approved just a few working days after the government announced the mechanism, which is designed to make project financing easier for the debt-ridden property sector.

The rapid roll-out of financial assistance under the mechanism is being closely watched by the market amid a debt crisis that has roiled the sector since mid-2021 and resulted in many unfinished homes and defaults, especially among the privately owned developers.

China's housing authorities told a meeting on Friday city governments should provide a list of local property projects suitable for financing support, and coordinate with local financial institutions to meet the financing need of these projects.

Securities Times said Nanning city in Guangxi region had provided its first "project whitelist" containing 107 developments to local financial institutions, and a project by state-backed Guangxi Beitou Industry & City Investment Group was granted a 330 million yuan development loan from China Mingsheng Banking Corp (600016.SS).

The southwestern city of Chongqing also has come up with a "whitelist" of 314 projects, with a total of 83 billion yuan in financing required, involving 22 financing institutions, according to the official Wechat account of the city's housing authorities.

According to a joint notice by the Ministry of Housing and Urban-Rural Development and the National Administration of Financial Regulation earlier this month, banks should shorten the approval time for projects under development that have sufficient collateral and income.

For projects that are facing temporarily liquidity difficulties but have a balanced cashflow, banks should extend or increase the loans, or adjust repayment methods to show support, the notice said.

($1 = 7.1814 Chinese yuan renminbi)