Hong Kong internet finance startup WeLab, which has recently raised 1 billion yuan (HK$1.19 billion) in its series B financing, is tapping into China’s rural communities, providing micro loans to individuals who traditionally have had limited access to credit. The investors in this round of fundraising include Dutch financial institution ING, Guangdong provincial government-backed Technology Group and Malaysian sovereign wealth fund Khazanah Nasional, WeLab founder and CEO Simon Loong announced in Beijing Wednesday. Proceeds raised would be used in brand building and technology so as to support an expanded lending over an existing internet platform, Loong said. Established in Hong Kong in 2013 and expanded to the mainland in 2014, WeLab positioned itself as a “pocket bank” providing micro loans for the youth, said Loong, a former Standard Chartered banker. Loon described his company as a “dark horse” in the internet finance sector. “Students and young people aged between 20 and 35 will be our target customers as they are the major internet users on the mainland,” he said. Loong also has plans to team up with the Postal Savings Bank of China, which controls WeLab’s strategic investor Ule, to provide lending business targeting rural residents. The use of mobile lending could become more popular in rural area as traditional banking services were insufficient, Loong said. WeLab has about 2.5 million users in Hong Kong and the mainland. About 9 billion yuan worth of loans have been requested by its user base. Bad loans amount to about 1 per cent of the total issued, while no fraud losses had been reported. Loong says data analysis has helped the company to analyse customers’ credibility and enhance risk management. About 70 per cent of WeLab’s lending is sourced from banks. Loon said he plans to lobby for participation by mainland-based banks, which have so far not participated in extending credit. Introducing the three new investors which had experience in internet banking, micro financing and investment in a wide range of financial assets would benefit WeLab’s future development, Loong added. Benoit Legrand, head of fintech at ING, said new technology is helpful in reaching individuals who previously had little or no access to bank lending. He added that companies like WeLab would be able to work together with traditional banks rather than competing with them in these markets. Loong said the series B financing had yet to complete and was still in talks to introduce more strategic investors. The company last year raised US$20 million in series A funding. The investors for this round included ICONIQ Capital, Sequoia Capital and TOM Group which is controlled by Li Ka-shing.