Discover China: Digital technologies enable inclusive finance in China

One night in 2016, Zhang Zelin was engaged in a fierce bidding war over a rental property where he planned to open a store for his fast-food business.

He had to transfer 50,000 yuan (about 7,142 U.S. dollars) to the owner within a few hours to win the bidding, or he would lose a golden opportunity to expand his fledgling business.

As he was worried about the funding, Zhang was thrilled to find that he was able to get a loan of 100,000 yuan from online bank MYbank due to his good credit rating on Alipay, one of China's leading digital payment apps.

"It took me no more than five minutes to get the loan. After the money was transferred in, I immediately called my partner to tell him that the funding problem was solved," Zhang said.

Today, Zhang's business is thriving. He and his partners have opened three Mo+ chain stores selling roujiamo, a traditional Chinese snack often dubbed the Chinese hamburger, in the eastern city of Hangzhou. They will open another branch in a major department store later this year.

Zhang is an early beneficiary of the inclusive loaning provided by MYbank. Since its founding in 2015, Alibaba-backed Internet bank MYbank has been dedicated to providing financial services for small and micro businesses, as well as online consumers through the Internet platform.

Through MYbank's mobile app, small- and micro-enterprise owners with good credit ratings can complete loan applications within minutes and get their much-needed funds in a matter of seconds. The whole process is done by artificial intelligence and involves no human assistance.

"I think small- and micro-business owners are a group of people with promising futures. They deserve our special attention and support," said Yi Hongtao, a business director at MYbank.

According to data provided by MYbank in June this year, over the past three years, the company has served over 17 million small- and micro-enterprise owners in collaboration with over 400 financial organizations. Each owner received an average of 30,000 yuan in loans.

"Using digital technologies such as big data can really make a big difference," said Yi. "It is the Internet that makes inclusive finance a real possibility."

WeBank, which is backed by another tech giant Tencent, has also been working to boost loan support for small businesses. By the end of last year, WeBank had served some 340,000 small and micro businesses, two-thirds of which had no previous loaning records.

China's capacity for providing financial services for small- and medium-sized enterprises (SMEs) has seen a remarkable improvement, with the credit supply constantly increased, financing cost steadily lowered and financial coverage widened.

By the end of 2018, data from the People's Bank of China showed that nationwide outstanding inclusive loans to SMEs reached 8 trillion yuan, up 18 percent year on year, 8.2 percentage points faster than the growth from 2017.

Zhang said loans from Internet banks play a big part in helping businesses grow, especially when they are in their infancy and badly in need of funding.

"Inclusiveness, convenience and swiftness are the main characteristics of inclusive finance," Zhang said. Enditem