The Alibaba-backed 5-year-old online lender MYbank provided loans to more than 20 million small and micro businesses in China as of the end of 2019, about 80% of which had no record of borrowing money from traditional banks.
The figures’ publication comes at a time when many small Chinese companies are struggling to access funding and recover from the fallout of the coronavirus pandemic, which has crippled the country’s economic activity for much of the first quarter.
MYbank said its average loan size was 31,000 yuan ($4,300) in 2019, up 20% year-on-year, with the default rate standing at around 1%, lower than the industry average of 3.22%.
MYbank also said that it plans to extend credit lines to 70% of the country’s small and micro businesses this year.
As of February, there were 83.5 million individually-owned businesses registered in China, employing more than 200 million workers, MYbank said, citing statistics from China’s State Administration for Market Regulation.
In recent years, small and micro businesses accounted for more than 60% of China’s gross domestic product, according to a report compiled by the country’s central bank and the China Banking and Insurance Regulatory Commission in 2018.
In 2018, Alibaba’s fintech arm Ant Financial launched an initiative aiming to supply small and micro businesses with loans totaling 1 trillion yuan over the next three years through MYbank. That was part of its efforts to use cloud technology to reduce financing costs and fast-track the loan approval process for such firms.
Contact reporter Ding Yi (email@example.com)