Ut­terly friendly, con­ve­nient, in­ter­est-free

China Daily (Canada) - - BUSINESS - By MASI masi@chi­nadaily.com.cn

For pub­lic re­la­tions man­ager Lena Lyu, 27, only three of the 40 apps that oc­cupy her 5-inch mo­bile screen have real value. All the three apps, in­clud­ing JD Fi­nance, are money-re­lated.

Wel­come to the world of In­ter­net fi­nance in China. It is a user-friendly, pop­u­lar per­sonal fi­nance chan­nel made pop­u­lar by In­ter­net com­pa­nies such as JD.com Inc and Ten­cent Hold­ings Ltd.

“I am an avid user of JD.com’s con­sumer credit ser­vice. With a 6,500-yuan ($988) monthly salary in Bei­jing, I live from pay­check to pay­check. But In­ter­net fi­nance helps me to tide over fre­quent money short­falls,” said Lyu, who re­ceived her mas­ter’s de­gree in in­ter­na­tional jour­nal­ism in July 2015.

“I just bor­rowed 50 yuan from JD to buy ar­ti­fi­cial flow­ers to dec­o­rate my bed­room. There is no in­ter­est as long as I pay the bill within 30 days.”

There are ben­e­fits be­sides zero in­ter­est for users of In­ter­net fi­nance, who are mostly young and smart­phoneTheir on­line be­hav­ior, es­pe­cially shop­ping habits, be­comes data for In­ter­net fi­nance com­pa­nies and a po­ten­tial as­set for them­selves.

A good record on­line con­verts to eas­ier ac­cess to on­line loans. “Com­pared with credit card com­pa­nies, JD Fi­nance is a breeze be­cause it re­quires noth­ing more than my name, ID card and phone num­ber. My shop­ping record and mo­bile-based pay­ment data on JD are enough to as­sessmy cred­it­wor­thi­ness,” Lyu said.

From April 2015 on­wards, when she be­gan us­ing JD Fi­nance, Lyu has bor­rowed, and re­paid (well, al­most), 27,000 yuan. “In ad­di­tion to shop­ping on JD.com, much of my bor­row­ing went to­wards house rent, about 2,200 yuan a month.”

It is imag­i­na­tive ser­vices like th­ese that are mak­ing In­ter­net fi­nance pop­u­lar. JD tied up with a prop­erty rental agency to make life eas­ier for job-seek­ing or newly hired fresh grad­u­ates, most of whom are its pa­trons.

JD pays their home rent for the en­tire year up­front to realty agen­cies. Con­sumers in turn re­pay JD on a monthly ba­sis, which ob­vi­ates the tra­di­tional quar­terly pay­ments to agents.

“No in­ter­est is in­volved and I don’t have to pay any de­posit, which of­ten equals one month’s rent,” Lyu said.

Yet, JD solves her prob­lem only partly. Lyu re­ceives her salary at the be­gin­ning of ev­ery month. She can barely sur­vive the month-end when she has to re­pay her debts.

This is when she turns to an­other in­no­va­tive In­ter­net­based fi­nance ser­vice called Weil­idai of Ten­cent. “This is the best choice to ad­dress tem­po­rary fi­nan­cial crunches. My abun­dant data on Ten­cent’s WeChat in­stant mes­sag­ing app has boosted my cred­it­wor­thi­ness,” Lyu said.

Cur­rently, she can bor­row as much as 27,000 yuan per month from Weil­idai, much higher than her bank’s credit limit of 7,000 yuan per month, at an in­ter­est rate com­pa­ra­ble to her bank’s.

In the past three months, Lyu bor­rowed 9,000 yuan fromWeil­idai.

That does not end her per­sonal fi­nance trapeze act. To meet her shop­ping needs, Lyu re­lies on Alibaba GroupHold­ing Ltd’s e-com­merce plat­forms Taobao and Tmall.

She is also among the early adopters of the e-com­merce gi­ant’s Ant Check Later, an on­line con­sumer credit ser­vice avail­able for the com­pany’s pa­trons. “I use JD Fi­nance when I buy con­sumer elec­tron­ics and books on JD.com. I re­serve Ant Check Later for cloth­ing and bags. Weil­idai is meant for fi­nan­cial emer­gen­cies,” Lyu said. “All of them have their own roles and they are an in­dis­pens­able part ofmy life.”

To be sure, peo­ple of Lyu’s ilk make sure they don’t get into a debt trap. So, they bor­row only to the ex­tent they can re­pay as soon as they re­ceive their salary. In short, for them, in­ter­net fi­nance is a ter­rific tool to main­tain cash flows, noth­ing more, noth­ing less.

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