Puhui Finance launches new consumer credit product
( chinadaily.com.cn )
Puhui Finance, a Shanghai-based financial service platform, launched a new brand of consumer credit products called "money station" on Friday, amid a rapid growth in China's consumer finance industry.
The company has been testing the brand for a year, and has received more than 1 million applications for consumer loans worth 16.4 billion yuan ($2.5 billion).
Dong Qi, co-founder and chief executive officer of Puhui Finance, said, "About 70 percent of the Chinese population does not have a credit card, and for those who have one, the credit limit on most of their credit cards is less than 10,000 yuan. In spite of a growing thirst for financial services like consumer loans, the penetration rate for credit cards is still very low in China, and the procedure of bank loan application is quite complicated. We're seeing great opportunities in this segment of the market."
"Based on the type of information submitted by the clients to apply for loans, Puhui Finance sets the credit limit for each client at a range of three to five times China's average credit card limit, which is below 10,000 yuan."
The company will expand such service to more customers in wider regions, targeting 359 cities in 29 provinces. They plan to do so via smart phones and personal computers and through more channels including WeChat, the most popular instant messaging application in China.
According to a report released by the Beijing-based iResearch Consulting Group in March, consumer lending rose 23 percent year-on-year to 19 trillion yuan in 2015 and is expected to hit 41 trillion yuan by 2019.
Gong Wen, director of the enterprise network security promotion committee at the Ministry of Industry and Information Technology, said on Friday, "Small and medium-sized enterprises raised funds of 800 billion yuan in 2015 through Internet financing. In Beijing, their financing costs were lowered from 30 percent to 15 percent, thanks to the help of peer-to-peer lending."
"As China is turning towards a consumer based economy, Internet-based consumption will account for half of the amount of the consumer economy. Consumer finance will make a tremendous progress."
He highlighted the importance of network security, which is the foundation of Internet finance.
Chen Xi, vice president of Puhui Finance, said the company has invested a huge amount of resources to build a dynamic risk control system based on big data analytics.
"We want to keep improving the system so that it can assess and predict the financial risks related to the clients more automatically and more intelligently."
"The data analyzed by our risk control system include the clients' credit report, records of consumption, and everyday behavior on the Internet. The system will analyze these data and keep digging the clients' social network to increase the accuracy of risk assessment," Chen said.