China Rapid Finance Clinches Institutional Partners, Expands Investment Round

Posted date: November
Original source: http://www.businesswire.com/news/home/20161115005672/en/China-Rapid-Finance-Clinches-Institutional-Partners-Expands

SHANGHAI–(BUSINESS WIRE)–China Rapid Finance Limited (“CRF”), China’s largest consumer lending marketplace in terms of number of loans, today announced wide-ranging partnerships with two leading financial institutions that make CRF the first-in-class marketplace to achieve institutional funding diversification with scale, and strengthen the company’s leadership position in China’s online finance industry.

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Strategic partnership signing ceremony. From left to right: Zhu Jijin, Shibei Branch manager, Bank of Shanghai; Dr. Zane Wang, CEO, China Rapid Finance; Zhou Ji’an, General Manager, China United SME Guarantee Corp., and Jiang Hong, vice president, Bank of Shanghai.

These partnerships will see China United SME Guarantee Corp. (“Sino Guarantee”) and Bank of Shanghai both join the China Rapid Finance lending platform.

Sino Guarantee will provide ongoing lending capital for loans originated on CRF’s platform, with an initial commitment of RMB 500 million. This gives CRF direct lending capital to create institutional investment products, as well as a non-recourse guarantee that enables distribution of CRF products on multiple wealth management platforms.

Additionally, Sino Guarantee provided CRF with US $20 million of growth equity, at a pre-money valuation of US $1 billion, as part of CRF’s $70 million Series C Preferred Share round. This will significantly aid CRF in acquiring new borrowers. The platform had grown to 1 million borrowers, and facilitated an industry-leading 8.8 million loans, as of the end of last month. Sino Guarantee, which made the commitments after a year of due diligence, is China’s premier financial guarantor for loans and bonds. It was founded by leading Chinese finance companies including the Export-Import Bank of China, HNA Holding Co. Ltd., and Baosteel Group Corp., and international institutions, JP Morgan Chase and Siemens China, who also serve on the board.

Separately, Bank of Shanghai has joined CRF’s digital lending platform as an infrastructure sponsor and lender, providing CRF with valuable payment channels, fund custody services, and lending capital support to help CRF keep its leading position in the consumer lending marketplace in China.

CRF’s newly announced partnerships with Sino Guarantee and Bank of Shanghai are expected to accelerate the diversification of its institutional lending base, providing CRF’s digital lending platform a long-term, low-cost and steady source of funds. Using advanced big data, predictive selection and automated decisioning technologies, CRF facilitates loans to China’s Emerging Middle-class, Mobile Active consumers in China (“EMMAs”).

“These transformational partnerships with Sino Guarantee and Bank of Shanghai reinforce CRF’s leadership position in China’s internet finance industry,” said Dr. Zane Wang, CEO of the Company. “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.”

“It is an important strategic decision for Sino Guarantee to enter the burgeoning consumer credit market in China,” said Sino Guarantee General Manager Zhou Ji’an. “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.”

“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,” said Jiang Hong, vice president, Bank of Shanghai. “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.”

As a pioneer in consumer credit in China, CRF has developed advanced predictive selection and automated decisioning technologies to serve the newly defined EMMA segment. With its multi-data, omnichannel partner strategy, CRF is able to identify, select and acquire creditworthy EMMAs and provide them with affordable credit. Most of the 500 million EMMA consumers in China have no credit history and cannot get loans from traditional financial institutions. By facilitating small consumption loans to the EMMA population, CRF helps them create their own credit histories and gradually climb up the credit ladder.