Chinese fintech industry leaders Dianrong (点融网) and Quark Finance (夸客金融) announced on March 20 that they will launch a financing business operation model called Dianrong-Quark Credit Factory, aimed at exploring new ways to increase access to financial services for both individuals and small and micro-sized businesses, according to a Dianrong press release posted on its website (in Chinese).
Pioneered by Singapore’s Temasek Holdings, the “credit factory” (in Chinese) model is a business model mainly used for credit certification of small and micro-sized enterprises as well as individuals. Loans lent to such groups are small, but are lent at high frequency. The adoption of the “credit factory” mode, thanks to its high efficiency and economies of scale in handling petty loans, can help big financial firms gain some ground lost to the country’s mushrooming small loan companies in the microfinance market.
An upgrade to the traditional “credit factory”, Dianrong-Quark Credit Factory utilizes such fintech means as big data, anti-fraud management systems, and decision engine. It can help lenders reduce manual operation, save costs and cut operation risks through its powerful quantitative system when they handle credit certification for individuals or small and micro-sized businesses.
The rollout of Dianrong-Quark Credit Factory risk management system comes at a time when the country’s US$ 60 billion worth of peer-to-peer (P2P) lending sector has been embroiled in a plethora of frauds and bankruptcy scandals in recent years. This may serve to help the P2P sector out of doldrums to some extent after it experiencing all such credibility crises.
Named the “Lending Club of China”, Dianrong is a leading peer-to-peer lending platform committed to providing innovative financial technology solutions to the Chinese marketplace. It was founded in 2012, and completed its US$ 207 million Series C funding round in 2015.
Quark Finance, which started operation in Shanghai in 2014, is a leading online financial institution specializing in personal financial service. With rich work experience in renowned global banking institutions, the firm’s management is experienced in risk management.