HAVANA, Cuba (AP) — Cuba announced a new credit system yesterday that will offer loans to small-business owners, private farmers and other citizens beginning next month, and established rules for paying independent contractors who do business with the state.

Credit will also be available to people looking to purchase building materials, pay for labor associated with home construction, “acquire goods for their personal property or satisfy other needs,” according to the government’s Official Gazette.

The lack of a system of lending has been one of the chief complaints of the expanding class of entrepreneurs who are running independent businesses as part of President Raul Castro’s economic overhaul, which aims to right Cuba’s foundering economy.

Economists have also said credit is a necessary element if the private businesses are to grow beyond subsistence levels.

Offering loans for home construction, meanwhile, could help address the island’s acute housing shortage and bolster Cuba’s brand-new real estate market, created earlier this month when property sales were legalized for the first time since shortly after the 1959 revolution.

“This is very important for me. It’s good for everyone,” said Nidia Corona, who makes a living selling bootleg CDs, one of the 181 legally authorized private-sector activities. “My home is in bad shape, and now I can ask for a loan to fix it up.”

Applications will be evaluated using people’s “legal personal income” as the most common source of repayment, according to the law.

It also allows people to take out mortgages on second homes or vacant lots, a novelty after five decades of prohibition against using homes as collateral.

Under the housing law that took effect Nov. 10, Cubans are limited to ownership of two properties — one primary residence and a second vacation house — to avoid accumulation of wealth.

The Official Gazette, a publication that disseminates new laws, said the credit system will take effect Dec. 20 and be rolled out “progressively, as the country’s economic and financial conditions permit.”

Financial institutions authorized by Cuba’s Central Bank will offer the loans in Cuban pesos, valued at 24 to the US dollar, rather than the stronger convertible currency, which is one to the dollar.

The Central Bank will also set minimum and maximum interest rates.

The lending system is the latest piece of Castro’s economic reform package, which the government touts as an update of its socialist model despite an increasing embrace of free-market mechanisms such as self-employment, a new tax code and liberalized rules on home and auto sales.

“I think these changes will have an impact,” said Magaly Dopico, who was sitting in the doorway of the home she rents out as a locksmith’s shop. “We have struggled for a long time, but finally things are improving.”

A separate measure published in the Official Gazette set the rules under which the state will pay private contractors, including a wide range of options covering everything from cash, debit card and bank transfers to checks, vouchers and IOUs.

Last week, the government put in place a law authorizing farmers to sell their products directly to state-run tourist hotel and restaurant concerns, eliminating the need to go through a state middleman, and said they could negotiate their own prices.