Lever­ag­ing tech­no­log­i­cal prow­ess for in­no­va­tive fi­nanc­ing

China Daily (USA) - - APEC SPECIAL - By ZHUAN TI zhuanti@chi­nadaily.com.cn Qiu Quan­lin and So­phie He con­trib­uted to this story.

As the only rep­re­sen­ta­tive from China’s fi­nan­cial tech­nol­ogy in­dus­try to speak at the 2016 APEC CEO Sum­mit held in Peru later this month, which comes hard on the heels of the G20 Lead­ers Sum­mit in Hangzhou in Septem­ber, Cred­itEase founder and CEO Tang Ning has much to share con­cern­ing in­no­va­tion.

“To build an in­no­va­tive econ­omy re­quires in­no­va­tive fi­nance en­abled by tech­nolo­gies,” Tang said, prior to his de­par­ture to Peru, where he is due to par­tic­i­pate in a dis­cus­sion on the econ­omy and in­no­va­tion at the meet­ing on Satur­day.

“Cred­itEase has ac­cu­mu­lated sub­stan­tial ex­per­tise in help­ing en­trepreneurs and small and medium-sized en­ter­prises, and it­self is also an en­ter­prise born out of an in­no­va­tive econ­omy,” he said.

Since its found­ing in 2006, the Bei­jing-head­quar­tered fi­nan­cial tech­nol­ogy com­pany has grown from be­ing a startup to a top peer-to-peer lender world­wide and one of the lead­ing wealth man­age­ment com­pa­nies in China. In 2015, the com­pany’s peer-topeer arm Yirendai listed on the New York Stock Ex­change.

Lever­ag­ing its fi­nan­cial tech­no­log­i­cal prow­ess in big data and the in­ter­net of things, the com­pany fo­cuses on in­clu­sive fi­nance, wealth man­age­ment and fi­nan­cial tech­nol­ogy in­no­va­tion.

In pur­suit of in­no­va­tions in the­o­ries, busi­ness modes and tech­nolo­gies, Cred­itEase has ex­panded its ser­vice net­work to 251 cities and 93 ru­ral ar­eas in China over the past decade.

Fi­nanc­ing for all

One of the Chi­nese gov­ern­ment’s tar­gets for the 13th Five-Year Plan (2016-20) is to cre­ate new jobs for more than 50 mil­lion peo­ple in ur­ban ar­eas and help im­pov­er­ished coun­ties na­tion­wide lift them­selves out of poverty, ac­cord­ing to the gov­ern­ment re­port re­leased at the an­nual Na­tional Peo­ple’s Congress in March.

While the cham­pi­oning of mass en­trepreneur­ship is in full swing across the coun­try, a large num­ber of SMEs, es­pe­cially in ru­ral ar­eas, face fi­nanc­ing bot­tle­necks due to a lack of ac­cess to fi­nanc­ing or lack of col­lat­eral for tra­di­tional loans.

More than 90 per­cent of the com­pany’s mi­cro­fi­nanc­ing clients need less than 100,000 yuan (about $14,500) and the av­er­age de­mand in the seg­ment is around 50,000 yuan.

“We’re try­ing to help them to es­tab­lish credit pro­files, ac­cess credit fa­cil­i­ties and se­cure in­surance through an in­no­va­tive model and tech­nol­ogy, through peer-to-peer credit loans that re­quire no mort­gage or se­cu­rity, and through crowd­fund­ing,” Tang said in an ear­lier in­ter­view with China Daily.

For in­stance, the com­pany has been work­ing closely with the Hainan Eq­uity Ex­change Cen­ter to pro­vide crowd­fund­ing ser­vices to lo­cal agri­cul­tural busi­nesses since 2015.

As of Septem­ber, six crowd­fund­ing projects had been launched and high-worth trans­ac­tions were clinched on­line, said Ban Miaoqi, gen­eral man­ager of the cen­ter.

Ben­e­fi­cia­ries of the crowd­fund­ing ser­vices in­clude An Shuoyu and Huang Xiaol­ing. The cou­ple, who fell in love at univer­sity, run a grape­fruit grow­ing busi­ness in Hong’an, Hainan, weath­er­ing the mess in their grape­fruit plan­ta­tion fol­low­ing a se­vere storm and the dif­fi­cul­ties in the early pe­riod of their op­er­a­tion.

They raised more than 60,000 yuan via the crowd­fund­ing plat­form within seven days and plan to ex­pand their pro­duc­tion.

YiqiFin was in­tro­duced by Cred­itEase as a fi­nan­cial ser­vice tai­lor-made for SMEs. It aims to raise 20 bil­lion yuan to help more than 20,000 mi­cro and small busi­nesses in the com­ing three years. Another fi­nanc­ing tool Yi­nong­dai has raised 200 mil­lion yuan, which has helped more than 20,000 women start up farm­ing busi­nesses.

Glob­al­ized op­por­tu­ni­ties

In ad­di­tion to in­clu­sive fi­nance, Cred­itEase’s busi­ness port­fo­lio in­cludes help­ing Chi­nese high-net-worth in­di­vid­u­als — those with $1 mil­lion or more to in­vest — al­lo­cate their as­sets world­wide.

“Fi­nan­cial in­no­va­tion en­ables mil­lions of high-net­worth in­di­vid­u­als to par­tic­i­pate in in­no­va­tion by pro­vid­ing funds to in­no­va­tive star­tups and en­trepreneurs,” Tang said.

Cur­rently some 3,000 wealth plan­ners at Credit-Ease branches across more than 40 cities on the Chi­nese main­land pro­vide one-on-one fi­nan­cial ad­vice to clients.

Be­sides branches on the main­land and in the Hong Kong Spe­cial Ad­min­is­tra­tive Re­gion, the com­pany also has of­fices in Sin­ga­pore, the United States and Is­rael that fo­cus on the lo­cal mar­kets and op­por­tu­ni­ties in these coun­tries. These units also de­sign in­vest­ment prod­ucts and con­duct risk con­trol as well.

Tech-pow­ered in­no­va­tion

The com­pany also helps in­vestors to man­age their wealth us­ing ro­bots.

A com­put­er­ized in­vest­ment ad­vi­sory ser­vice called Toumi RA, or “robo ad­viser”, launched by Credit Ease in May, helps to build in­vest­ment port­fo­lios us­ing al­go­rithms af­ter in­vestors have com­pleted a ques­tion­naire about their in­vest­ment goals and risk tol­er­ance, ac­cord­ing to the com­pany.

“The au­to­mated wealth man­age­ment ser­vice is a smart and sci­en­tific tech­nol­ogy on mo­bile ter­mi­nals that in­di­vid­ual in­vestors can use to in­vest glob­ally and in­ex­pen­sively,” Tang said.

Ac­cord­ing to him, the com­put­er­ized “robo ad­viser” can as­sess re­ports from hun­dreds of clients a day.

“In tra­di­tional wealth man­age­ment, no more than 10 such re­ports are as­sessed by ex­perts a day. Thus, the au­to­mated wealth man­age­ment ser­vice will greatly de­crease the money spent on ex­perts and in­crease ef­fi­ciency,” Tang said.

With­out tech­no­log­i­cal in­no­va­tion, risk man­age­ment could not work, he said.

“We will con­tinue to in­crease in­vest­ment in tech­no­log­i­cal sys­tems and data mod­els for smarter credit man­age­ment and risk con­trol.”

To build an in­no­va­tive econ­omy re­quires in­no­va­tive fi­nance en­abled by tech­nolo­gies.” Tang Ning, founder and CEO of Cred­itEase

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