Ailing small and medium-sized enterprises in Wenzhou, Zhejiang province, are struggling to pay back loans, which led to a 28-month peak for the nonperforming loan ratio at local banks in October.

The monthly NPL ratio at banks in the city increased from 0.37 percent in June 2011 to 4.31 percent in October 2013, a record-high in over two years, China Business News reported.

In October, the total amount of NPLs stood at 31.1 billion yuan ($5.1 billion), up 0.04 percent on a monthly basis. The city's NPLs increased 19.6 billion yuan in the past 10 months.