Online consumer lender China Rapid Finance today announced it has reached the 20 million cumulative loan mark, a number that has nearly doubled over the past six months. Second quarter facilitated loans rose by more than 350 per cent to north of five million.
“We are well on track to continue expanding our platform as we serve the needs of our target Emerging Middle-class, Mobile Active consumers (EMMAs),” chairman and CEO Dr. Zane Wang said.
Dr. Wang explained his company’s tiered strategy, which has generated a repeat borrower percentage of 73.
“Our ‘low and grow’ strategy starts out new borrowers with smaller, shorter-term loans and then selectively offers larger, longer-term loans to repeat borrowers that demonstrate positive credit behavior. We are well-positioned to scale with a low borrower acquisition cost of retaining high-quality EMMAs as they build their credit histories on our platform, and have the potential to serve their lifetime credit needs. As a result, our ‘low and grow’ model creates high customer lifetime value and a source of sustainable growth for the Company.”
Dr. Wang welcomed efforts to regulate the online lending industry.
“In addition, PRC regulators have launched efforts to maintain high standards in the fast-growing online lending industry, to eliminate non-compliant industry players and thus to build a stable, sustainable, and healthy environment in which compliant and responsible companies will be able to thrive and grow. We welcome these initiatives and believe they will benefit the industry leaders such as China Rapid Finance.”
China Rapid Finance estimated there are 500 million EMMAs in China who have no credit history and experience difficulty obtaining loans. The company’s technology leads to a low cost of acquisition and the tiered strategy should produce strong stream of lifetime customers, they predict.