MYbank, the new Chinese online lender from Alibaba Group Holding Ltd.’s finance affiliate, aims to extend loans to as many as 10 million smaller enterprises in five years as it vies for a slice of a $4 trillion market.
MYbank will extend loans of under 5 million yuan ($805,000) to private individuals and small firms, a market traditionally under-served by state-run lenders, Lucy Peng, chief executive officer of Zhejiang Ant Small & Micro Financial Services Group Co., said Thursday.
Ant Financial’s new service is the latest battleground between China’s Internet giants and follows Tencent Holdings Ltd.’s creation of WeBank, which began offering a commercial banking service in April. Both have trained their sights on an estimated 23 trillion yuan household loans market that’s growing rapidly as more Chinese seek out credit.
MYbank “has a goal of servicing 10 million small and medium enterprises and hundreds of millions of consumers in five years,” Peng said at a press conference in Hangzhou.
Peng said MYbank will eschew technology from Oracle Corp., International Business Machines Corp. and EMC Corp., relying instead on Alibaba’s native cloud computing capabilities. That would make it the first bank globally to do so, she said.
MYbank requires regulatory approval before it can begin taking deposits and setting up accounts online.
Ant Financial, which powers the majority of transactions across Alibaba’s e-commerce platforms, has expanded into other financial services. It operates China’s leading online payments system Alipay, a money-market fund with 711 billion yuan of assets, and a credit-scoring service.
On Thursday, MYbank governor Yu Shengfa said they will explore opportunities to work with state-run lenders China Postal Savings Bank and China Construction Bank in future, without elaborating.
He said MYbank would charge lower rates than Tencent’s WeBank, without providing specifics.
— With assistance by Alexandra Ho, and Lulu Chen