Con­sumer credit com­pa­nies look to ex­pand cus­tomer base with lower in­comes

China Daily (Hong Kong) - - BUSINESS - By ZHU WENQIAN zhuwen­qian@chi­nadaily.com

Ma­jor con­sumer credit com­pa­nies say they are highly con­fi­dent about the growth po­ten­tial of China’s con­sumer finance mar­ket, and plan to fur­ther ex­pand their cus­tomer base in the main­land, mainly to those clients with mid­dle and low in­comes as well as ru­ral res­i­dents.

China’s con­sumer finance prod­ucts cus­tomers are mainly young peo­ple aged below 30, and more than 60 per­cent of them have a monthly in­come lower than 5,000 yuan ($720), ac­cord­ing to a new re­port re­leased by the Cen­ter for China in the World Econ­omy at Ts­inghua Univer­sity.

The re­port said most of the cus­tomers don’t have credit cards and credit his­to­ries. Most of them use loans to buy durable con­sumer goods, mainly house­hold elec­tri­cal ap­pli­ances, in ad­di­tion to mo­tor­bikes, elec­tric ve­hi­cles and agri­cul­tural ma­chin­ery. Although con­cerned about the lend­ing rate, over half of cus­tomers are more con­cerned about the ap­pli­ca­tion re­quire- ments and dif­fi­cul­ties of get­ting ap­proval.

“China’s con­sumer finance mar­ket has a huge po­ten­tial and we are con­fi­dent we will grow with the lo­cal mar­ket,” said On­drej Frydrych, CEO of Czech-based Home Credit, a lead­ing for­eign lender to con- sumers in China.

“We will fur­ther in­crease in­vest­ments in China, deepen our busi­ness, and ex­pand our cus­tomer base of peo­ple with lower in­comes,” he said.

With a na­tion­wide dis­tri­bu­tion net­work and cus­tomer ser­vice net­work in China, Frydrych said Home Credit had a clien­tele that was mostly not fi­nan­cially so­phis­ti­cated. He said his com­pany wanted to help them to pro­mote their fi­nan­cial lit­er­acy and un­der­stand their re­spon­si­bil­i­ties as well as the process of loan re­pay­ments.

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