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Customers' new installment way to go shopping

By Shi Jing (China Daily)
Updated: 2010-03-02 11:24
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A 36-year-old foodstuff salesman became the first person in China to try out a brand new way of shopping, signing up for newly launched consumer financing in the capital Monday.

Beijing was the first city nationwide to launch the service, which allows people to buy things in installments.

Customers' new installment way to go shopping

Zhang Hongqi fills in forms to become the first consumer of the city’s first consumer financing company. [CHINA DAILY]

Zhang Hongqi made history in the Dazhong Electronics outlet in the Central Television Tower, becoming the first customer of the Consumer Finance Company of the Bank of Beijing.

"On average, only one yuan (15 cents) a day will be charged extra for my new iPhone," Zhang said. "It is really a bargain. And I only needed to provide proof of my income status, which was produced by my company. It is really convenient."

He completed his purchase in 20 minutes.

Zhang's new cell phone cost 5,880 yuan ($861). Annual interest will cost him 366 yuan at a rate of 11.32 percent, which is about twice the current prime interest rate.

During the one-year term of the loan, Zhang will pay about 520 yuan a month and can enjoy his phone right away.

"I do have a credit card but I have no idea how I can possibly pay in installments with this card," he said. "This consumer finance company is the first one ever introduced to the Chinese mainland. So, I thought it would be a good idea to have a try."

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Zhang has worked for a food company based in western Beijing for about five years.

"I make 3,650 yuan a month now," he said. "It is true that I could have made the purchase in one go but the phone is not cheap and if I did, I would probably have nothing left for the next two months. This way, I have room to make other purchases."

Song Wenchang, vice-general manager of the Consumer Finance Company, Bank of Beijing, said the newly introduced company will complement the business of the bank.

"The Consumer Finance Company has different targets to credit card companies. We view everyone with a regular income and a stable job as our future customers," said Song. "The retail market is very promising in Beijing, with a turnover volume of about 530 billion yuan last year. So, we hope credit cards and consumer financing can work together to explore a bigger potential market."