MYbank plans stellar SME support
Ant Financial’s MYbank has unveiled its “Star Plan” as it targets providing financing services to 30 million SMEs and farmers in China over the next three years.
Liyuan Feng started her original teaware business with RMB 10,000 ($1,537). She launched her own brand in 2015 and used short term MYbank loans to finance expansion. Her business now employs 150 people.
As part of this ambition, the bank says it will offer its artificial intelligence (AI), computing and risk management capabilities to 1,000 financial institutions.
Eric Jing, chairman of MYbank, executive chairman and CEO of Ant Financial, says: “The widespread application of advanced technologies in the SME financing space has dramatically improved risk management and lowered costs. With these innovations, we can unlock new opportunities for financial institutions and enable them to sustainably serve the needs of SMEs and farmers.”
The bank is keen to rationalise and cites “Toward Universal Financial Inclusion in China”, a joint report published by the People’s Bank of China (PBOC) and the World Bank in 2018.
According to that report, 14% of China’s small businesses have access to loans or line of credits, compared to 27% of smaller firms in G20 countries.
The report highlights a number of reasons why SMEs did not apply for credit including “complex application processes, high costs of obtaining a loan, insufficient loan size, and long review and approval periods”.
According to China’s State Administration for Market Regulation, as of July 2017, there were approximately 73 million SMEs in China.
Voices of approval have also been wheeled out to back up the Star Plan.
“The traditional brick-and-mortar banking model is inefficient, with high costs and complex risk management processes,” adds Neng Wang, chairman of Guilin Bank.
Guilin Bank started working with MYbank in November 2015, using its tech to offer collateral-free small business loans to farmers.
As of June 2018, Guilin Bank had issued a cumulative RMB 350 million ($54 million) in small business loans to more than 20,000 farmers.
