Alibaba teams up with mainland banks to offer loans to SMEs
Mainland e-commerce giant Alibaba, preparing for a high-profile US public offering, announced yesterday that its online trading subsidiary Alibaba.com will team up with seven mainland banks to offer loans to small and medium-sized enterprises (SMEs) based on their online credit.
The seven banks are Bank of China, China Merchants Bank, China Construction Bank, Ping An Bank, Postal Savings Bank of China, Bank of Shanghai and Industrial Bank. This is the first time traditional banks will offer unsecured loans to SMEs based on big data and credit system accumulated through Alibaba's online platform. The maximum credit will be 10 million yuan (HK$12.6 million).
"Banks are willing to join internet firms as more loans mean more interest income for them," said Ricky Lai, an analyst at Guotai Junan International. He expected to see more internet finance products launched in the second half of this year.
Exporters not operating on Alibaba's online platforms can also apply for a loan but the amount will be different. One dollar exported by the firm would translate into a 80 fen loan. The banks will approve the loan, and Alibaba will provide export records of the companies over the last six months through customs and logistics channels.
Alibaba, led by its founder and chairman Jack Ma Yun, has reshaped the retail and logistics sectors in China. It was the first internet company to launch an online wealth management product for mainland consumers last June. By the end of last month, the Yu E Bao money market fund had raised 574.1 billion yuan and signed up more than 100 million investors.