China has approved the opening of a third private bank to help finance the country's booming small and micro businesses.

The Wenzhou Minshang Bank Co., Ltd., located in the eastern manufacturing hub of Wenzhou in Zhejiang Province, has been approved by the Zhejiang Banking Regulatory Commission, the China Banking Regulatory Commission (CBRC) announced on Friday.

The bank will provide financial services for small and micro companies in the city of Wenzhou, which includes taking deposits, granting loans, and handling settlements.

With registered capital of two billion yuan (326 million U.S. dollars), the bank is scheduled to start operating within six months after securing a license and business registration from local banking and business regulators.

The CBRC approved the establishment of five private banks in the third quarter of 2014. Three have been green-lighted, including the Shanghai Huarui Bank Co., Ltd. and the Shenzhen-based Webank, which was partly funded by Chinese Internet giant Tencent.

The Chinese government has more than once pledged to support small and micro businesses, which create more jobs than state-owned firms.