New project loans approved from late March, but in tiny volume
Banks push back on new lending despite Beijing39;s repeated nudges
Slow 39;whitelist39; progress adds to challenge of home completion

HONG KONG, May 14 Reuters When China39;s local governments began compiling a whitelist of housing projects for loans earlier this year, troubled developers hoped it would open a spigot of credit for a sector that remains a major stumbling block to a broad economic revival.

Four months later, new funding is only coming by the drip, reflecting the deepseated caution about the outlook for Chinas residential property market, according to Reuters interviews with bankers and developers.

Banks have been reluctant to heed Beijing39;s repeated nudges to bolster credit to the embattled sector given the risks of more bad loans, further undermining confidence in the crisishit property market seen as crucial to shoring up a shaky economy.

New loans were only approved since late March, according to the sources, which surprised companies and investors who had expected fresh lending for developers at the start of the 39;whitelist39; programme months earlier.

The main hurdle to granting more new bank loans is the current weak property market conditions, said Lawrence Lu, managing director at SP Global Ratings.

Developers need to have a project in place to get funding … the issue now is whether the project can generate sufficient cash flow to repay the debt, he said.

At least six…