Chinese giant establishes online bank for SMEs

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June 29, 2015 2:45 PM

MYbank follows in the footsteps of Alibaba arch-rival Tencent, which began trial operations of its WeBank, China's first online bank, in January.

Alibaba has numerous investments all over china and the rest of the world.

Sources say an Alibaba financial affiliate debuted Internet bank MYbank, targeting small and medium Chinese enterprises that have struggled to obtain credit from major financial institutions.

MYbank, which is 30% owned by Alibaba-linked AntFinancialServices, says it has four billion yuan ($644 million) of registered capital and will offer loans of up to five million yuan ($805, 503).

It will only be able to take in deposits when regulators approve a facial recognition technology that allows its customers to remotely open bank accounts, an Ant Financial spokesperson said, according to various media outkets.

"MYbank is here to give affordable loans for small and micro enterprises, and we are here to provide banking services, not for the rich, but for the little guys," said EricJing, executive chairman of MYbank.

MYbank follows in the footsteps of Alibaba arch-rival Tencent, which began trial operations of its WeBank, China's first online bank, in January.

MYbank's target clientele means it will pose little immediate threat to China's big state-owned lenders, who have seen deposits eroded by Alibaba-related wealth management product Yu'e Bao, which is now China's biggest money-market fund.

Credit conditions have remained tight for SMEs, despite a series of policy easing, as banks avoid the companies worst hit by an economic slowdown. State-owned banks have also avoided customers such as farmers and smaller businesses because of the difficulties in assessing their credit worthiness and they have little to offer as collateral.

Ant Financial has said it will use its SesameCredit arm, which analyses data from its payment processing arm Alipay and Alibaba's e-commerce sites to assess risk and price loans for MYbank customers.

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