Tencent Holdings, China's largest publicly traded Internet firm, has launched the country's first online-only bank. Dubbed WeBank, the financial institution is named after the company's popular messaging app WeChat, and is operating under a pilot program that aims to expand private banking in the country.

The goal of the pilot is to help small, privately owned companies, that provide around 60 per cent of China’s GDP and around 75 per cent of new jobs, but have long been at a disadvantage getting loans from government banks, which prefer lending to larger, state-owned groups.

WeBank's launch ceremony was attended by Chinese Premier Li Keqiang, who also approved the bank's first loan of 35,000 yuan (~$5,600) to a truck driver. "We will lower costs for and deliver practical benefits to small clients, while forcing traditional financial institutions to accelerate reforms," Li said at the ceremony. "It's one small step for WeBank, one giant step for financial reform."

Needless to say, being an online-only bank, WeBank will have no brick-and-mortar branches in China, and analysts expect that most loans will be under ¥1 million ($160,680).

Tencent is a major player in the Chinese internet industry, offering a wide range of services, including e-commerce, online gaming, the IM platform QQ, messaging app WeChat, and more.

The news comes nearly a year after the China Banking Regulatory Commission (CBRC) granted licenses to ten private investors, including rival Alibaba, to launch five private banks.