Peer to peer lending is booming in China. There are an estimated 1575 lending platforms, according to Wangdaizhijia. But most of these P2P companies are targeting the urban and sub-urban markets. The exception to this is CreditEase and Eloancn, according to a recent report.
Ning Tang, CEO of CreditEase Corp, was recently quoted on greater China; “Rural areas are strategically important avenues for us to expand our business and to provide diversified financial services. We are looking to set up an exclusive cloud-based rural financing platform with 1,000 service outlets in rural areas over the next five years.”
An anecdotal story was shared about a farmer from Yangyuan county, Gansu province, in need of a loan for business expansion. He visited an office of CreditEase and walked away with a 20,000 yuan ($3,200) loan. After paying that loan off – he went back for another. The P2P loan was described as a “turning point” for the farmer and his business.
The ubiquity of smartphones, even in rural areas, is viewed as a catalyst for internet finance. According to the report, over 70% of mobile phones are smartphones in rural communities.
Mao Xiangqian, CEO of Beijing Tongcheng Eloancn Network Co Ltd, share his perspective: “This year, we expect to cover at least 70 percent of the counties in China through our original ‘city O2O’ (online to offline) mode and expect transaction volumes to exceed 10 billion yuan.”
Eloancn is said to cover 500 counties in 2014 and the transaction volume last year was about 2.1 billion yuan, reaching more than 35,000 farmers.
While there remain many challenges especially with borrowers that possess little credit data and not much collateral. Eloancn is working with local partners to mitigate such risk. Local operators are expected to manage the loans tool.