Taking the fast lane there is a lot less traffic...
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Zane Wang, Founder & CEO China Rapid Finance LendIt 2017 New York, March 7, 2017 Taking the fast lane there is a lot less traffic there
Transcript of Taking the fast lane there is a lot less traffic...
Zane Wang,Founder & CEO
China Rapid Finance
LendIt 2017New York, March 7, 2017
Taking the fast lane there is a lot less traffic
there
2
Consumer finance in the beginning of the century (2000)
US
✓Credit reporting – 3 major credit bureaus
✓Decision science – Scoring and decision engines
✓Consumer finance – Credit cards
What about China?
× No credit bureau × No decision science × No consumer
finance
But...Vast market opportunities
3
Consumer finance in the beginning of the century (2000)
China
4
Consumer finance today in 2017
✓Credit reporting – 3 major credit bureaus –Big data
✓Decision science – Scoring and Decision Engines –AI
✓Consumer finance –Credit cards –Alternative lending
US
What about China?
5
The same elements as in the US...
Credit reporting Central Credit Bureau covers 800M people1
Decision Science Adopted from abroad
Consumer finance / credit cards Serving 300M1
1. Source: the PBOC credit center data report, Oct 2015
24%
15%
9%
8%
Malaysia
Taiwan
Hong Kong
Thailand
China 2%
Non-Mortgage Credit as a Percentage of GDP
Size of China’s Internet consumer finance market Unit : billion yuan
3,398.34
1,942.89
998.34
436.71118.3561.860.68
2011 2012 2013 2015 2016 2017e 2018e 2019e
Growth {%y-o-y}
18.32
2014
174 223 546 269 129 95 75205
...and there is tremendous growth potential
Source: iResearch Inc.
60%
% of adult population with credit cards1
500 million²
opportunity
EMMAs
Emerging Middle-class Mobile Active
>18 to 29 years old
>educated
>lives in a 2nd or 3rd tier city
>works at a small company
>smartphone user
16%super prime
near prime
prime
EMMA and her challenges
1. Source: The World Bank Global Findex Database, 2014. 2, Source: the PBOC, 2015.
Why 500M EMMAs NOT being served
Licensed financial institution solutions: − Lending rates strictly regulated, delinquency rate closely monitored
− Very costly to collect borrower data
Installment loan solutions: − Very high service fees to cover borrower acquisition cost
− Can only serve large loans due to high cost
Short term cash loan solutions: − Service fees are extremely high to cover the acquisition cost − Additional fees are required to cover credit loss
While the fundamentals are strong:
How to make it happen?
High number of people employed with quality jobs ✓
Stable social economic status✓Rising amout of discretionary spending✓
It’s Technology!
Big data solution for “weak associations” models
Data and channel partners to cut down cost
Predictive Selection Technology drives large scale, low cost, and good quality borrower acquisition
RMB 500
consumption
RMB 500-
2,000
consumption
RMB 2,000- 5,000
consumption
RMB 5,000- 10,000
lifestyle
RMB 10,000- 50,000
lifestyle
Affordable lifetime credit needs
“Low and grow” strategy
Congrats! You are offered credit.
Automated Decision Technology drives credit usage, risk quality, and sustainable growth
Taking the fast lane there is a lot less traffic
there
