BEIJING (AFP) - China will launch a system of loans to pay for home appliances, tours and weddings, state media said Wednesday, in a move to stimulate spending during the current economic slowdown.

The government will allow the establishment of so-called "consumption finance companies" in Beijing, Shanghai, Tianjin and Chengdu on a trial basis, the Shanghai Securities News reported.

The companies, which will not accept public deposits, will lend to consumers to allow them to pay for tours, weddings, home decoration, electronic products and home appliances, said a draft regulation posted Tuesday on the national banking regulator's website.

The level of the loan should not be greater than five times the borrower's monthly income, it said.

The firms will approve the loans quickly and will require no collateral, making them more attractive than commercial banks, the Shanghai Securities News said.

The companies should have registered capital of no less than 300 million yuan (S$64.1 million), according to the draft rules.

The draft regulation said interested financial institutions with five years' experience in related business and total assets of at least 80 billion yuan could invest in the companies.

It said some non-financial institutions also could invest but provided few details.

It was not clear how the companies would be run or by whom.

Chinese people are among the world's most determined savers, with economists estimating they put away 30 to 40 percent of their disposable income.

By the end of March, China's household savings had reached 25.1 trillion yuan, up 11 percent from the end of last year, according to official data.

As part of its efforts to boost domestic consumption in a bid to replace slumping exports, Beijing has already rolled out a programme to subsidise farmers' purchases of home appliances and autos.

In the first four months of 2009, retail sales, the main gauge of consumer spending in the world's third-largest economy, expanded by 15 percent compared with the same period in 2008, the government said Wednesday.

For all of last year, retail sales were up 21.6 percent, previously released government data showed.

The World Bank has forecast growth of 6.5 percent in the Chinese economy in 2009, the lowest level since 1990.