ChinaFinance and insurance2015 – ongoingMYbank
"310" collateral-free loans for small businesses
MYbank approved small-business loans in one second with no human review and, with partners, served 29 million firms
Problem
Small and micro businesses in China, from street vendors to online shops, often lack the collateral and financial statements that bank lending usually relies on, which makes small loans to them hard to assess.
Approach
MYbank, an online bank founded in 2015 and affiliated with Ant Group, scores borrowers on transaction and other data instead of collateral. Its "310" model lets a business apply on a phone in under three minutes, get a decision in under one second, with no person involved in the approval. A study by the Bank for International Settlements of Ant Group's lending found that this credit tracks firm-level transaction data and does not move with house prices or local business conditions.
Results
Takeaway
MYbank used transaction-based scoring to approve collateral-free loans without manual review; its reported reach of 29 million businesses included its partners.
Categories
- Size
- Large enterprise
- Industry
- Finance and insurance
- Business function
- Finance, risk and legal
- Innovation type
- Business model innovation
- AI technology
- Predictive analytics and ML
- Adoption
- Built in-house
- Evidence
- Company's own claim
Sources
Source summaries
In a release about credit for sellers ahead of the 11.11 shopping festival, MYbank describes its "310" model: a loan applied for on a phone in under three minutes and approved in under one second with no human involvement. It says MYbank and its partners had served 29 million small businesses by June 2020, that 98% of borrowers under the model were repaying on time during the pandemic, and that the average loan was RMB 36,000.
The Bank for International Settlements compares credit from Ant Group, which operates MYbank, with bank lending to more than two million Chinese firms that borrowed from both. It finds that the big-tech credit does not move with house prices or local business conditions but responds strongly to firm-level data such as transaction volumes and network scores, while bank credit tracks house prices. The authors suggest that data-based lending could reduce the role of collateral.
Full details are in the original sources.
