If China’ consumer finance industry is to maximize its full potential, technology will have to play a key role, China Rapid Finance CEO Dr. Zhengyu Wang told an audience at LendIt 2017 in New York this week.
Twenty years ago China had no real credit bureau, consumer finance sector or decision science capability, Dr. Wang said. They’ve caught up some, as the ensuing two decades have seen 300 million credit cards issued. While impressive, that only represents 16 per cent of consumers (the American penetration rate is 60 per cent).
China’s middle class is growing faster than credit providers have been able to reach them, Dr. Wang said. Called EMMAs (emerging middle class mobile-active consumers), they are between 18 and 29 years of age, well-educated, living in cities and avid smartphone users.
And 500 million of them do not have access to credit, thanks to strict regulation on lending rates and the expense of data regulation, Dr. Wang added.
The solution is in data analytics, a method used to great success by CRF, Dr. Wang said. CRF has become China’s largest consumer lending marketplace by employing new proprietary technologies which incorporate machine learning and data algorithms to quickly capitalize on non-traditional and unstructured data.
CRF topped the 10 million loan facilitation mark by the end of 2016.