As P2P lending in China is crippled with fraud and trials, institutions do not wish to miss out on an important revenue stream. One Chinese province sees an emergence of creative financing to boost the economy and support emerging industries.
Pick #1. Creative financing stimulates growth in emerging industries
Sujing Electronic Material obtained a 3-million-yuan loan over 12 months from the Jiangnan Rural Commercial Bank Co Ltd by using patent rights as collateral.
Another loan of 10 million yuan was agreed by using its trademark as security, while a 5-million-yuan loan was put together on a risk-sharing mechanism at a favorable monthly lending rate.
Backed by regulators, financial institutions have been exploring innovative risk-sharing measures with municipal and provincial governments. The Suzhou municipal authority in Jiangsu province set up a credit guarantee fund of 1 billion yuan for companies meeting the requirements of a special bank loan, without providing any collateral. By the end of June 2017, 1,820 companies had obtained loans worth 6.42 billion yuan with the help of the credit guarantee fund.
This, in turn, has stimulated growth in parts of the economy that produce goods and services.
In the first half of 2017, sales revenue from strategic emerging industries in Jiangsu increased by 12% year-on-year to 2.62 trillion yuan.
Pick #2. Digital payments gateway PayU eyes acquisitions to enter lending segment
The firm, which is owned by South Africa’s Naspers Ltd, plans to either acquire or partner startups, companies and banks to offer both secured and unsecured loans in the Indian market by April. These M&As could be both domestic and global. The company has already made three such investments in companies — Kreditech, Paysense, and ZestMoney — for consumer and SME lending.
This year, the company will be investing in firms that have strong underwriting capability and that it might look at three or four such investments this year. The company will be focusing on e-commerce, travel, and education space for loans.
Pick #3. Baidu teams up with BlackBerry on self-driving and connected car tech
Baidu has a number of high-profile partners signed up for its Apollo program. These include leading automakers, as well as tech companies including Microsoft, Nvidia, Intel, and many others. Its goal is to build something akin to the Android of self-driving, which is open to use by all with the goal of accelerating the pace of autonomous driving development.