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Monday, July 29, 2019

Lending / 

Jack Ma’s $290 billion loan machine is changing Chinese banking by caixin


Using real-time payments data and a risk-management system that analyzes more than 3,000 variables, Ma’s four-year-old MYbank has lent 2 trillion yuan ($290 billion) to nearly 16 million small companies. Borrowers apply with a few taps on a smartphone and receive cash almost instantly if they’re approved. The whole process takes three minutes and involves zero human bankers. The default rate so far: about 1%.

The implications of MYbank and its peers growing more comfortable with smaller borrowers could be profound. Nonstate enterprises -- mostly small businesses -- account for about 60% of growth, employ 80% of workers, and have been disproportionately squeezed by a more than two-year government crackdown on shadow lenders.

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