Alipay starts online financing for SMEs

China's largest online payment provider Alipay announced the official launch on Monday of Zhaocai Bao, an Internet finance platform that aims to reshape financing for small businesses to the tune of 1 trillion yuan ($162 billion) within three years.

For investors, the Zhaocai Bao (Money-drawing Treasure) platform offers products with average annualized returns of between 5.4 percent and 6.9 percent. In comparison, the annualized return rate for Yu'ebao, China's largest money market fund, has fallen to about 4.1 percent since its launch in June 2013, while China's one-year fixed-term deposit rate is 3 percent.

Zhaocai Bao is different from Yu'ebao as its major product consists of loans to small businesses, while the latter is a money market fund managed by Tianhong Asset Management.