Forbes Asia August 2017

12 | FORBES ASIA AUGUST 2017

W

hat can you do in

52 seconds? Internet

juggernaut Alibaba

can generate

RMB 1 billion in

sales for its annual online shopping carni-

val. Last November 11, China’s so-called

Singles’ Day, sales across Alibaba plat-

forms reached new heights: RMB 120 bil-

lion, or $17.9 billion. Behind the dazzling

numbers is its Alipay unit’s new tool Hua

Bei (“Just Spend”).

Hua Bei functions as a mini-loans pro-

vider. Users can pay for purchases in in-

stallments within a month after goods are

delivered. Hua Bei accounted for 28% of

the transactions made on Singles’ Day in

2016. Fifteen million users applied to in-
      crease their Hua Bei credit limit before
      the carnival even began. Once debt-leery
      Chinese consumers are finally at ease
      with spending borrowed money, at least
      online.
      Offline borrowing, however, is still
      largely absent. Hua Bei is basically a vir-
      tual credit card, but 60% of the users have
      never owned a physical credit card. Tra-
      ditional banks are not lending money to

individuals because they lack a reliable

credit score. In fact, most Chinese peo-

ple, by Western standards, are simply “un-

scorable”—only 25% of the population

have a credit history.

The remaining 75% is the battleground

Chinese fintech companies are racing to-

ward. They say that with big data they

can provide alternative credit scores to

the unscorable. More-established con-

tenders include China Rapid Finance and

CreditEase, and Yongqianbao has joined

the fray. The winning strategy, they say,

is twofold—targeting the right potential

FORBES ASIA

RAPID-FIRE FINANCE

SCORING

WITH THE

‘UNSCORABLE’

Chinese fintechs use their big data to extend

credit to the smartphone masses.

BY REBECCA FENG