A leading financial academic in China says that fintech has the potential to solve the problem of finance being expensive and difficult to obtain for small businesses in the country’s real economy.
Xiang Songzuo (向松祚), vice-head of Renmin University’s International Monetary Institute, said that China’s small and medium-sized enterprises suffer from three main problems when it comes to securing financial support.
These include the difficulty of credit assessments due to lack of information, difficulty with regard to collateralised guarantees, as well as the difficulty and high-cost of service provision.
As a consequence of these three difficulties, Song says that state-owned enterprises and real estate companies continue to make off with the vast majority of total social financing in China.
Xiang made the remarks at the launch of the “Small and Medium-sized Enterprise Financial Services Reform and Fintech Cutting-edge Research” white paper (中小企业金融服务变革与金融科技前沿研究) at the “2018 International Monetary Forum – Fintech Sub-Forum” (2018国际货币论坛·金融科技分论坛) held at Renmin University in Beijing last week.
The white paper was jointly produced by the Renmin University School of Economics and Finance, OneConnect and the Internet Finance Association of Small and Medium-sized Banks (IFAB).
According to Xiang China can use emerging forms of fintech such as artificial intelligence, big data, cloud computing and bio-identification to resolve the majority of financing problems that small and medium-sized businesses encounter.
Xiang said that new fintech enterprises should pragmatically explore new paths, in order to thoroughly resolve the problem of financing being both difficult and expensive for Chinese enterprise.