This new platform will compliment Huirong’s traditional short-term collateral-backed loan business. The platform had a soft launch in January and since then has seen RMB 20.5 million in loan originations with nearly 15,000 registered users. The platform is aiming to halve funding times for borrowers. Receiving finance via the platform should take just 3-7 days on average, which the company says is 50% faster than the banks.
Mr. Chen Yannan, Chairman and Executive Director of the Board of China Huirong, commented:
"The development of Internet financing has received increasing attention from the Nation, which was highly recognized by Premier Li Keqiang earlier this year. Meanwhile, China Banking Regulatory Commission has officially incorporated the Internet financing into its regulatory scope to enhance the protection for the operators and customers, showing supports to the development in the industry from the Government."Mr. Chen added:
"Internet financing is one of the core strategies for the future development of China Huirong. With years of abundant experience in providing offline financial services, the Group is constantly seeking for opportunities to diversify the business and is committed to become a comprehensive financing service provider. We believe the launch of the P2P Lending business is beneficial to the Group as the arrangement there under created a new income stream for the Group with minimal additional capital investment. We hope that Suzhou Money will provide efficient, transparent, secured and convenient online financing services with high yields for the micro, small and medium enterprises and individuals, as well as to help build us a solid customer base and maximize the long-term returns for the Group and shareholders.”
To list on the platform borrowers have to pass stringent tests. This includes a risk assessment and they have to provide a guarantee on the loan repayment. The company has stressed that the testing procedures that the borrowers will undergo highlights that it is being recognized that tighter control that is needed within the Chinese P2P industry. But steps are being taken to change this. FICO recently launched a risk management platform in China and eleven of China’s leading alternative finance platforms have signed up to use it. This need for quality control and fraud prevention is something that was talked about at the Chinese People’s Political Consultative Conference. Once appropriate regulations are put in place, we may see the amount of fraud in the Chinese industry be brought under control.