The finance vehicle of Chinese retail giant Suning has entered an agreement with a leading digital bank in China to provide digital supply chain financing to micro-and-small enterprises.
Suning Finance and XWBank recently entered an agreement on “digital supply chain financing” according to a 17 September report from state-owned news outlet Finance.china.com.cn.
Under the Agreement the two parties will implement fintech measures including data-based risk control and full digitisation and online conversion of business models to improve supply chain financing to the several tens of thousands of MSE’s that comprise Suning’s industrial ecosystem.
Suning and XWBank said the cooperative agreement is part of efforts use fintech to shore up financial inclusion, in response to calls from Chinese regulators to reduce the cost of financing for small businesses in the wake of the COVID-19 pandemic.
Official data indicates that in the first seven months of 2020 the financing costs of Chinese market actors fell by more than 870 billion yuan, via means including reductions to interest rates and processing fees, as well as deferrals of principal and interest payments for loans.
As of the end of June 2020 Suning Finance had already provided its services to over 80 million affiliated card users, as well as 260,000 micro, small and medium-sized enterprises.
Sichuan-based XWBank is the third direct online lender to be established in China and has provided its services to 32 million customers, including 120 million financial inclusion loans worth over 420 billion yuan in total.