The local government of Wenzhou said the city's business closures have eased, somewhat quelling the debt panic in the entrepreneurial city.

Chen Jun, deputy secretary general of the city government, told a press conference on Saturday no major business owners have fled in recent weeks, while 15 missing tycoons had either returned or resumed contact with the city.

Since April, nearly 100 Wenzhou tycoons have reportedly skipped town to avoid repaying their debts, which have accumulated to more than 10 billion yuan ($1.58 billion) in bank loans or shadow loans. A few businessmen committed suicide, reported the Xinhua News Agency.

Among the returned tycoons is Hu Fulin, owner of the Zhejiang Center Group, a major eyeglass maker. Hu received aid from several local banks through mediation by the government, according to a report on the business news website cb.com.cn. Meanwhile, other local glasses manufacturers set up a fund to help Hu sail through the difficult period. Hu's company resumed business two weeks ago, with more than 500 employees back to work.

By the end of October, five enterprises had started the process of reorganization with a fund of 50.8 million yuan, said Chen.

"The number of enterprises keeps rising this year, and business closures haven't seen an abrupt increase compared to that of last year," said Chen. "Though a growing number of companies have run into problems, they are mostly small-scale business entities."

A man surnamed He with a shoe-making equipment plant in the city said the local business mood has improved recently, the China News Service reported. He said that's because the government has rolled out measures to aid small- and medium-sized enterprises (SMEs).

However, another major private enterprise, Wenzhou Liren Education Group, is reportedly on the verge of bankruptcy due to debts worth 2.2 billion yuan, mainly borrowed from informal lenders.

After the government applied the brakes to the country's monetary supply due to concerns about rising inflation, SMEs had more difficulty in raising funds. Bai Chengyu, secretary general of the China Association of Microfinance, told the Global Times the undeveloped financial market has led to the prosperity of informal lending, from which SMEs get quick loans.

Caijing magazine quoted Zhou Songshan, deputy head of the Wenzhou branch of the People's Bank of China, as saying that "some 60 percent of Wenzhou families are involved in informal lending."

Disputes regarding repayment of non-bank lending often lead to criminal acts against the debtors such as unlawful restraint and injuries. By the end of October, local police had investigated 93 such cases, according to the China News Service.

"We should bring underground lending into the light and regulate the industry, given that it is generated by market demands. With proper supervision, we could mitigate its risks and provide an alternative funding channel for SMEs," said Bai.

The local government has set up a 1 billion-yuan fund to provide companies with emergency financing. The fund will "in principle" offer loans of as much as 20 million yuan for as long as 10 days, Xinhua reported.

This is another step by the authorities to rein in the plaguing debt crisis in the city, after Premier Wen Jiabao visited the city in early October, pledging support to SMEs. The central government has unveiled measures including a streamlined process for export tax rebates and tax breaks.