A bank in China's Tibet autonomous region is providing loans of up to 2 million yuan ($290,000) to start-ups.

According to the Lhasa office of the People's Bank of China, the policy will benefit individual start-ups and businesses set up with partners, which are entitled to credit lines of 500,000 yuan and 2 million yuan respectively.

The lending bank is the Tibetan branch of Postal Savings Bank of China and its local offices.

Recent college graduates and laid-off workers who apply for start-up loans are allowed discounted interest rates.

The terms of loans will not exceed 20 years. Applicants should hold Tibet's household registration and have capital of not less than 30 percent of the amount required for business operation.

Over the past few years, the government has been encouraging young Chinese to embrace start-ups and become entrepreneurs and create a new growth paradigm for the economy. Financing is cited as one of the main obstacles for starting businesses.

Entrepreneurship has taken roots in some coastal boomtowns, but in land-locked regions like Tibet, the local economy remains largely dependent on state funding and state-owned businesses.