The operators of peer-to-peer (P2P) lending platform Jimubox launched a new unit on Thursday that uses big data to evaluate loans to consumers and small firms, which are seen as having strong potential to grow in China.
The unit, featuring a lending software called "Powered by Dumiao," can review a loan application in 10 seconds, compared with one or two weeks at banks, the company said.
Interest rates will vary depending on an applicant's credit standing, which will be calculated using big data, the company said.
Dumiao aims to serve would-be borrowers who have found it difficult to secure loans from banks.
Consumer finance is set to boom in the next few years, as consumption plays an increasingly important role in driving China's growth, Shen Zhongxiang, an analyst at Internet consultancy Analysys International, told the Global Times on Thursday.
Shen said that using big data for lending decisions is an obvious move, but the technology is still not fully developed.
The data belongs to -different Internet platforms and isn't easy to integrate, according to Shen.
Domestic major e-commerce platforms such as Alibaba Group Holding and JD.com Inc has launched similar credit plans for users, based on data drawn from their purchasing behavior.
Jimubox founder Dong Jun on Thursday also -announced the formation of PINTEC Group, which will be a holding company for Jimubox and Dumiao.
Dong also serves as the CEO of the new group.
Previously Dumiao has been in operation under the lending platform Jimubox for about one year.
It has granted 2.48 million loans, 80 percent of which were for less than 1,000 yuan ($152), the -company said.
Now the two companies will be separate subsidiaries of PINTEC Group.
Analysts said that online P2P lending platforms must diversify their services amid fierce competition and increasing government scrutiny.
The industry is consolidating, with several high-profile defaults taking place since mid-2015.
As of May 31, there were 2,396 P2P platforms operating in China, down 35 from a month earlier, according to a monthly report industry portal wdzj.com released on Thursday.