The online lending market in China gained a notable entrant last week with the launch of MYbank. An online bank with a focus on consumers and small and medium enterprises (SMEs), MYbank is backed by a group of investors including Ant Financial, a financial arm spun out of Alibaba.
Beyond the financial backing, as part of the relationship with Alibaba, MYbank will be using credit data from the commerce giant’s AliPay product to conduct analysis for loans. MYbank customers will have access to loans up to RMB 5 million ($805,000). MYbank is counting on their efficient business structure to allow them to squeeze profits from the smaller size loans. This includes operating an online bank with no physical locations, as well using credit and sales data available from AliPay. In addition, MYbank will be able to circumvent the typical expenses required to market to and onboard new customers, as they will have access to the existing Alibaba network of SMEs.
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The connecting of lenders with Alibaba merchants in China follows a partnership that was signed with Lending Club earlier this year. In that deal, Lending Club’s services became available to US SMEs using AliExpress to purchase inventory.
In addition to Ant Financial, other investors in MYbank include Fosun Industrial, Wanxiang Sannong, and Ningbo Jinrun. With its arrival, MYbank marks the second time a an online bank has launched in China this year, with an existing market of users. Earlier in the year, WeBank became the first online only bank to launch in China. Backed by Tencent, WeBank was modeled and being marketed to WeChat’s over 400 million users.