HANGZHOU -- East China's Zhejiang province approved regulations on private financing for Wenzhou city on Friday, according to local authorities.

The regulations, approved at the 6th session of the 12th Standing Committee of the Zhejiang Provincial People's Congress, are the first of their kind in China.

According to the regulations, private loans involving more than 3 million yuan ($492,000) or more than 30 lenders should be recorded by local financial management authorities or private lending registration service centers.

The full context of the regulations has not yet been published.

The State Council, China's cabinet, approved the establishment of a pilot financial reform zone in Wenzhou in March last year to regulate private finance after a crisis in the city in 2011.

In Wenzhou, a large number of small and medium-sized enterprises (SME) used to resort to underground financing as state-owned banks failed to meet their needs.

However, with the monthly interest rates as high as five percent, some companies were unable to return the loans and went bankrupt. Other companies were affected as many of them were loan guarantors for each other.