Favorable policies and technological advancement have been great accelerators for innovation in China’s inclusive finance sector during the past few years, according to a recent industry report.
The country’s inclusive finance industry has seen increasingly rich products and services, more diversified participants, rapid development of digital financing and innovative and sustainable business models.
The report was jointly released by the National Institution for Finance and Development, the National Public Information Platform for Party Media and WeBank, China’s first online-only lender.
After 40 years’ reform and opening-up, there are still a large number of people in the world’s second largest economy who cannot be easily reached by traditional banks and are financially underserved.
Back in 2016, the State Council rolled out plans to promote the country’s financial inclusion development and, in 2017, the top banking regulator released guidelines to boost large and medium-sized banks to set up inclusive finance divisions.
To better cater to the financial needs of customers like blue-collar workers, self-employed business and people living in remote and undeveloped areas, industry players like Shenzhen-based private commercial lender WeBank have introduced various targeted products like “micro loans.”
The amount of small loan products is set between 20,000 yuan (US$2,925) and 200,000 yuan, which does not require guarantees or collateral and can be repaid at any time.
By relying on technologies such as big data, blockchain and cloud computing, WeBank is able to control default risks by gathering users’ information for credit assessment, making it a reality for the masses to benefit from inclusive finance.
Li Nanqing, president of WeBank, said that inclusive finance has extensive and profound connotations, with “equitable access” being its essence.
Last November, the bank unveiled its first product aimed at helping small and micro businesses in Shenzhen.
Ping An Puhui, a consumer finance arm of the Chinese insurance giant Ping An Group, is another front-runner in offering innovative services for financial inclusion. The company exports credit auditing and consulting services to credit providers and funders and provides diversified loan service solutions for borrowers, the report said.