Xiaomi’s XWBank Crossed RMB100bn in Issued Loans in 20 Months

Online direct bank XWbank (aka. Sichuan Xinwang Bank) had reached RMB 100 billion in consumer loan issuance as of August 2018, only 20 months after its inception in December 2016, according to TodayCFC, a local news outlet focused on consumer finance.

Consumer lending is the bank’s major business that had originated a total of more than 30 million loans to 14 million borrowers as of May 2018. The average loan amount was about RMB3300. The delinquency rate is about 0.27%. The average APR is 18%.

The consumer loan product, named Haorendai (好人贷), is not only available on XWBank’s website and mobile app but also on a variety of Chinese online consumer lending platforms or mobile apps, including Ant Cash Now (the online cash loan product of Ant Financial), Didi (mobile ride-hailing), Lufax (marketplace lending), China UnionPay (interbank network), and Tencent.

Funds are mainly from local commercial banks.

Its in-house developed automated system handles over 99% of the loan originations and spends an average of 40 seconds to process a loan.

XWBank’s other businesses include enterprise banking and custody services for online lenders. (The Chinese regulator requires peer-to-peer lending platforms to use custodians and XWBank is one of the approved custodian banks.)

The bank began to turn a profit in the first quarter of 2018 that generated RMB 58 million, RMB 87 million and RMB 95 million in net profit in Q1, Q2, and Q3, respectively.

XWBank is the third direct private bank in China, after MyBank, affiliated to Ant Financial, and WeBank which is an affiliate to Tencent. Different from XWBank and WeBank, Ant’s MyBank has been focused on SME lending.

Source: WeBank, TodayCFC

Sichuan Silver Mi Technology, a wholly-owned subsidiary of Xiaomi Finance, holds a 29.5% stake in XWBank.


Financial Tech Solution Provider PINTEC Files for IPO on the NASDAQ

PINTEC, a China-based financial tech solution provider, has just filed to get listed on the NASDAQ.


The company provides online financial solutions in point-of-sale financing, personal and business installment lending, wealth management, and insurance brokerage.

Revenues are primarily from lending solutions. In 2017, 74.8% of the revenues were from service fees from personal and business installment loans and 24.6% from point-of-sale installment loans.

As of March 2018, it had 179 business customers, mainly online services, and 81 financial partners, including conventional financial institutions and peer-to-peer platforms. High-profile customers include Ctrip, the leading online travel service, and VIP.com, the leading flash sales site.

Its first product was launched in June 2015. In 2016 and 2017, PINTEC solutions facilitated over 8.5 million and 21.3 million loan applications, respectively, and a total of RMB4.8 billion and RMB15.2 billion (US$2.4 billion) in loans, respectively.

In 2016 and 2017, the company recorded RMB54.9 million and RMB568.7 million (US$90.7 million) in total revenue, respectively, and RMB200.5 million and RMB84.9 million (US$13.5 million) in net loss, respectively.

It turned its first profit in the first quarter of this year.

ChinaFintech – All Major Chinese Apps Now Extending Consumer Credit

Toutiao, a leading mobile content platform, and Ofo, a mobile bike rental service, have recently added consumer loan offerings onto their apps. Now almost all major mobile apps in China have begun offering credit to their users, either financing purchases on their online retail platforms or at partner physical stores, or providing unsecured cash loans, or both.

Majors tout instant or near-instant approval decisions made possible through their automated or near-automated underwriting systems, either developed in-house or by third-party lenders or solution providers.

Many claim they apply machine learning, or AI, for credit risk modeling. Their data sources include their own online services and third-party alt-data vendors.

Alternative data is widely used by the local alternative lending industry as China doesn’t have a well-established consumer credit reporting market and the credit information database operated by the central bank serves mainly established financial institutions. Some major Chinese internet companies have data points considered having high predictive values for credit decisioning, such as payment histories, and online and offline purchases.

Thanks to the widely adopted alt-data-assisted credit decisioning, tens of millions of Chinese consumers with previously limited credit histories or limited access to credit now have a variety of credit options on the mobile apps they are using on a regular basis.

By pushing loan offerings to the pre-approved users, the borrower acquisition costs are significantly lower than through traditional offline channels.

While many internet companies partner with established financial institutions or online lenders, major internet companies like Ant Financial (Alibaba’s finance arm), JD and Tencent have been funding loans through their own financial subsidiaries or affiliates. ABS (asset-backed securities) backed by consumer loans became a major source of capital for some of them, particularly Ant Financial which was the biggest issuer of ABS in China in 2017.

A few tech giants have become major players in China’s consumer finance market. Ant Credit Pay, a revolving credit line available to qualified Alipay users, announced 100 million customers in mid-2017. Weilidai, the cash loan available on WeChat and Mobile QQ of Tencent, reached RMB100 billion (US$15 billion) in outstanding loans in 2017.

Given the ongoing regulatory tightening on internet-based consumer finance, some online consumer lenders with end-to-end capabilities plan to switch focus to become more of a lending technology solution provider. Ant Financial announced in May that the Ant Credit Pay would introduce third-party funding partners, banks and other financial institutions. JD Finance, the finance arm of JD, said in April this year that they planned to sell all loan receivables to financial institutions and then focus on providing technology platforms.

ChinaFintech – Ride-hailing Network DiDi Now Offering Full-fledged Financial Services

Screenshot of DiDi Financial Service Page

DiDi, the leading mobile ride-hailing service, has tapped into online consumer lending, auto leasing and sales financing, personal investing and digital payments.

Most of the current lending offerings are funded and administered by banks and other financial institutions. DiDi provides data and analytics capabilities to partner third-parties.

The six-year-old service claims to have accumulated more than 550 million riders and 21 million registered drivers.

Personal Loans

DiDi recently dark launched a new payment option that offers riders a 500 yuan (US$75) open-end credit line. It is funded by a local small loan company. (link in Chinese)

Earlier in April, DiDi app added Dishui Dai (滴水贷), which provides unsecured personal loans up to RMB200,000 (US$30,000). Funded and administered by XWBank, the online direct bank minority-owned by smart device maker Xiaomi, the loan was designed to be available to some 100,000 select accounts on DiDi for the initial launch. (link in Chinese)

After making an investment in DiDi in early 2016, China Merchants Bank began to provide car installment loans to DiDi drivers. All DiDi drivers could apply and credit decisions would be based not only on the credit history of the driver but also the data provided by DiDi. China Merchants Bank claimed they’d be the only bank to finance new car purchases by Didi drivers. (link in Chinese)

In August 2017 DiDi registered a loan company, Chongqing Xi’an Micro-credit Co., Ltd.(重庆西岸小额贷款有限公司) (not official translation).

Auto Leasing and Sales Financing

DiDi established a financial leasing company, Zhongfu Financial Leasing (Shanghai) Ltd. (众富融资租赁上海有限公司), in March 2016. It now provides financing options to car buyers and auto leasing and sales companies on the subsite for car listings within DiDi apps.

In 2016 DiDi added Di Fenqi (滴分期), a car installment loan available to all app users, that finances car purchases through dealers and car leasing companies on its platform. (link in Chinese)

In March 2018 DiDi registered an issue of RMB 100 billion (US$ 15 billion) ABS backed by auto leases to finance new car purchases by car leasing companies on its car listing subsite.

Money Market Fund

DiDi Jinjubao (金桔宝), launched in March 2017, allows users and drivers to buy into a money market fund with their account balances. The fund is managed by a domestic mutual fund company.


By working with third-party insurers, Didi offers auto, travel, and health insurance plans to both drivers and users, and some creative offerings such as a “traffic jam” insurance.


Didi fully acquired digital payment company Gaoyang Jiexun (19Pay) in December 2017.

In 2016 DiDi and China Merchants Bank issued co-branded debit and credit cards.

ChinaFintech – 2017 Results of Ant’s MyBank

MyBank (aka. Zhejiang E-commerce Bank), the online direct bank affiliated to Ant Financial, reports big jump in loan origination volume to RMB 446.8 billion in 2017, compared with RMB 87.9 billion originated during the period between mid-2015 and the end of 2016.

The outstanding balance increased to RMB 96.3 billion at the end of 2017, up from RMB 32.9 billion one year ago. The average loan balance per borrower was RMB 28,000 in 2017, up from RMB 15,000 one year ago.

The total number of business borrowers, the target market of MyBank, had reached 5.7 million as of the end of 2017, up from 2.77 million one year ago.

Duoshou Duodai (多收多贷), a loan product for micro-businesses who use Alipay QR code payment service to accept payments, signed up 1 million customers between June and December 2017. The number would increase to 3 million by June 2018.

The total revenue and net profit increased by 52% and 28%, respectively.

Source: MyBank

In 2017, RMB 26.5 billion worth of loans, or 6% of the total, was made to borrowers located in rural areas. The outstanding balance of rural loans was RMB 3.9 billion, or 11.9% of the total, as of the end of 2017. Rural borrowers reached 750,000, or 1.3% of the total, in 2017.

Delinquency rate was 1.23%. The company has developed a series of big data-based borrower credit assessment and other risk management systems.

The average APR decreased by 1% in 2017. Capital adequacy ratio was 13.5%.

Yulibao (余利宝), a money market fund that allows business customers to buy into with their account balances, had had 6.75 million customers as of the end of 2017. The fund is managed by Tianhong Asset Management Co. Ltd, a mutual fund company majority-owned by Alibaba and the manager of Yu’e Bao (余额宝).

Ant Financial, the digital finance arm of Alibaba, is the biggest shareholder in MyBank that holds a 30% stake in it. Incepted in June 2015, MyBank is one of the three online-only banks in China — The other two are WeBank, an affiliate of internet giant Tencent, and XWBank (新网银行), backed by smart device maker Xiaomi.

While MyBank is focused on serving small businesses especially the merchants of the e-commerce and financial services of Alibaba and Ant Financial, WeBank mainly targets consumers on WeChat and QQ, Tencent’s massively popular messaging apps. Ant Financial’s consumer lending business is operated through two separate small loan companies.

Source: MyBank, WeBank (Click to enlarge)

HK Online Lending Firm WeLab Files for IPO

WeLab Holdings Ltd., the Hong Kong-based online lending firm, has filed for an IPO on the Hong Kong Stock Exchange.

Founded in 2013, the company operates an online consumer credit business and also provides consumer lending technology solutions to other lenders.

Source: WeLab

WeLab facilitates online consumer loans through WeLend, one of the first online lenders in Hong Kong, and WoLaiDai (我来贷), a marketplace lending platform for the mainland China.

While the site for Hong Kong is a balance-sheet lender, the mainland operation is a marketplace lender that connects institutional investors and other funding partners with borrowers on the WoLaiDai platform.


The company has developed in-house pre-screening system and other risk management capabilities for WoLaiDai platform. Loan process takes about five minutes. WeDefend, its risk management and fraud detection system, analyzes some 2500 data points.

It takes about two weeks for WoLaiDai to add a funding partner onto its platform as it connects them through APIs instead of listing them directly on its site.

Funding partners include investors on peer-to-peer lending platforms, commercial banks, consumer finance companies and micro-loan companies in the mainland.

WoLaiDai had facilitated a total of 2.1 million loans and signed up 28 million registered users as of March 31, 2018. The repeat borrowing rate increased from 16.8% in 2015 to 55.3% in 2017.

The total loan originations were US$2 billion as of March 31, 2018. The average loan amount was US$1010 in 2017.

The average APR was 25.5%. M3 delinquency ratio is between 0.4% and 1.5%.


The total loan originations on WeLend were US$292.6 million as of March 31, 2018. The average loan amount was US$11,251 in 2017.

The average APR is 24.7%. M3 delinquency ratio is between 0.1% and 0.2%.

The repeat borrowing rate increased from 25.7% in 2015 to 51.6% in 2017.


Revenue sources include interest and other fees from WeLend, loan facilitation and service fees generated from WoLaiDai and service fees from the business-facing offerings.

A majority of the revenues in 2017 was from the WoLaiDai platform. The company turned profitable in 2017.

The total assets were US$125 million, US$173 million and US$397 million in 2015, 2016 and 2017, respectively.

Source: WeLab

ChinaFintech – Consumer Credit Reporting Agency Baihang Signs up 120+ Data Partners

Baihang (百行征信), the only licensed consumer credit reporting agency mainly targeting alternative lenders, has reached data sharing partnerships with more than 120 companies in internet finance and traditional consumer finance sectors. (link in Chinese)

Baihang would collect and process data submitted by partners and in turn provides access to its credit information database and other “value-added” services.

Before the establishment of Baihang earlier this year, major Chinese lenders that offered loans online largely relied on their in-house developed credit screening systems which take alternative data from both their own sites and third-party vendors into account.

The first batch of 15 companies to get integrated onto Baihang’s platform are mainly online lenders.

Here’s the list,

Established internet companies

Online consumer financing providers

Licensed consumer finance companies

Auto finance companies