Marketplace lending platform, China Rapid Finance, announced on Tuesday it has formed partnerships with two financial institutions, China United SME Guarantee Corp. (Sino Guarantee) and Bank of Shanghai.
The lender stated Sino Guarantee would provide ongoing lending capital for loans that will originate on its platform, with an initial commitment of RMB 500 million. It was noted that this partnership gives China Rapid Finance direct lending capital to create institutional investment products along with non-recourse guarantee that enables distribution of its products on various wealth management platforms. China Rapid Finance also revealed that Sino Guarantee would then provide $20 million of growth equity, at a pre-money valuation of $1 billion as part of the lender’s $70 million Series C Preferred Share round.
Bank of Shanghai joins China Rapid Finance as an infrastructure sponsor and lender. It will be providing the lender with payment channels, fund custody services, and lending capital support to help China Rapid Finance keep its position in China’s consumer lending marketplace. Sharing more details about the partnerships, Dr. Zane Wang, CEO of China Rapid Finance, explained:
“These transformational partnerships with Sino Guarantee and Bank of Shanghai reinforce CRF’s leadership position in China’s internet finance industry. CRF has created a new model for an internet finance platform through its collaboration with traditional financial institutions. These strategic partnerships strengthen CRF’s leadership position in the consumer credit market, expand its services to EMMAs, and illustrate an attractive way for traditional financial institutions to create a winning internet finance strategy through collaboration.”
Sino Guarantee General Manager, Zhou Ji’an, also commented:
“It is an important strategic decision for Sino Guarantee to enter the burgeoning consumer credit market in China. With over a decade of experience in the consumer credit industry in China, CRF has technology and market advantages. This partnership will be win-win for both parties.”
Jiang Hong, Vice President of Bank of Shanghai, then added:
“Benefitting from government support and a large addressable market, companies providing inclusive finance and internet finance solutions such as CRF will have huge potential in China. Combining the advantages of a traditional financial institution and an internet finance platform, Bank of Shanghai and CRF are cooperating to tap this emerging opportunity.”