WeBank Says Digitization the Key to Solving Financing Challenges of China’s Small Businesses

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China’s most profitable privately operated bank says it is focusing on the use of fintech and digitisation to help resolve the financing challenges of the country’s small businesses.

Gong Li (公立), enterprise finance head at Tencent-backed private lender WeBank, said that China’s small-scale enterprises continue to struggle to obtain funds from traditional lenders.

“The latest data indicates that there are over 50 million micro-and-small enterprises in China, but they only have a financial services coverage ratio of 7%,” said Gong on 17 April at the 2022 Wudaokou Global Financial Forum in Beijing.

Gong said that as a digital bank, Webank had focused since its founding on the use of technology to resolve the financing challenges of small enterprises, and in particular reductions to risks and costs.

“We have focused on servicing long-tail clients, expanding the inclusion coverage scope, and helping to drive the quality development of micro-and-small finance…77% of our clients have operating revenues of under 10 million yuan, and 67% are obtaining bank loans for the first time. At present we have provided loans to nearly 600,000 enterprises, and credit to 900,000 enterprises.”

Gong highlighted three key areas for digitisation of financial inclusion banking operations:

  1. Digitisation in the form of big data risk control.
  2. Digitisation in the form of targeted sales.
  3. Digitisation in the form of refined operations.

In 2021 WeBank accounted for over 50% of the profits of China’s privately operated lenders.