China Rapid Finance CEO Reports: China Consumer Finance Challenge Needs High-Tech Solution

Dr. Zhengyu (Zane) Wang, founder, chairman and CEO of China Rapid Finance Limited, revealed at the 2017 LendIt USA 2017 conference the challenges to expanding consumer finance in China’s population. According to Wang, the country has emerged from being a market that in 2000 featured essentially no credit bureau, decision science, or consumer financing.

During his keynote speech at LendIt, Wang stated that China’s consumer finance market today boasts many of the same elements as the U.S. China now has a central bureau for credit reporting that covers 800 million people, while credit cards serve about 300 million people. He did say that while the reporting is up, China’s consumer finance market has a long way to go, in a nation where non-mortgage credit is to 2% of GDP and about 16% of Chinese consumers have credit cards, compared to about 60% in the U.S.

Wang also explained:

“Some 500 million people still have no access to consumer credit, despite having quality jobs, and rising discretionary spending. This consumer segment has been labeled by CRF as Emerging Middle-class Mobile Active consumers, or EMMAs. The group is characterized by people who are typically 18-29 years old, well-educated, urban, and avid smartphone users. Licensed financial institutions have generally not served this population for a variety of reasons, including the strict regulation of lending rates, and the high cost to collect data from such a large group.”

Wang then said that serving the group without access to consumer credit demands a high-tech solution that utilizes big data analytics. He claimed that China Rapid Finance has also become the largest consumer lending marketplace in China due to the number of loans that are being facilitated by developing technology that uses machine learning and big data algorithms that analyze thousands of points of non-traditional and unstructured data. He added the marketplace lending platform is the only one in China to use Predictive Selection Technology to acquire customers on a massive scale at low cost. This has allowed China Rapid Finance to facilitate over 10 million loans as of December 31, 2016.

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