Millions of young peoplein China’s smaller cities have signed up for the Yu’e bao online investment platform as Ant Financial Services Group, Yu’e Bao’s owner, pushes into less-developed regions of the country.Ant Financial brings biz loans, investment products to rural China.
Last year alone, more than 20 million rural China residents opened Yu’e bao accounts and invested in the platform’s popular money market fund, according to Ant Financial. These subscribers earned a cumulative total of RMB 700 million ($112 million)in 2014.
Most new Yu’e Bao subscribers are coming from smaller Chinese cities with strong private sectors, among them Dongguan, Wenzhou, Suzhou, Quanzhou and Chengdu, Ant Financial said. Three out of four newcomers are people born after 1980.
Yu’e bao made a splash when it debuted in2103by offering investors the ability to stash small amounts of cash in a new money market fund yielding higher returns than bank savings accounts. The fund quickly grew into one of the largest money market funds in the world.
Ant Financial continues to attract new users, particularly in less-developed parts of the country that are underserved by banks and other conventional financial-services companies.
Working with Alibaba Group, which has ties to Ant Financial and is China’s largest e-commerce company, Ant is trying to bring innovative financial products, including small business loans, to rural areas, said Ant Financial Chief Operating Officer Eric Jing.
Last October, Alibaba Group announced plans to invest RMB 10 billion ($1.6 billion) over the next three to five years to build e-commerce facilities in rural China, including the establishment of thousands of local “service centers” where villagers can purchase and sell goods through Alibaba’s shopping websites Tmall.com and Taobao Marketplace.
“In terms of helping rural commerce to grow and thrive, Ant Financial acts as the financial supporting facility, and is dedicated to serving rural residents along with Alibaba Group.” Jing said.
Ant recently announced it would support the establishment of rural e-commerce service centers by providing their independent operators with unsecured, interest-free business loans ranging from RMB 10,000 ($1,599) to 30,000 ($4,797).
Since 2010, Ant Financial’s business lending subsidiary has provided financing to 180,000 rural SMEs through an Internet-based loan program that gives cash-starved merchants on Alibaba’s platforms, many of them selling farm produce or handicrafts, access to capital.
These and other initiatives are aligned with the Chinese government’s national development policies. During the opening of the National People’s Congress in Beijing this month, Premier Li Keqiang said Beijing plans to liberalize its banking and financial sector to make the economy more inclusive and promote greater commercial opportunities in rural China.
Jing said the proliferation of the smartphone is making it possible to deliver innovative financial services such as Alipay Wallet, Ant Financial’s mobile e-payments subsidiary, to China’s hinterlands via the mobile Internet. In the future, villagers in the countryside will have the same access to financial services as city dwellers, he said.
“By building infrastructure and collaborating with partners, we strive to boost rural consumption and commerce, and bring farmers a better life.” Jing said.
