Alibaba’s bank is tempting small businesses
MyBank is an online bank owned by the online shopping giant Alibaba which provides services to 3.5 million small business owners.
MyBank wants to take over a market share that does not have credit from commercial banks in China and aims to take over a pool of about 80 million potential customers. The method: low-interest rates and a unique risk calculation system
Maybank is one of the first private investment banks in China along with Vibank of Tencent Holdings which was established solely through private equity investments. This is part of a test-drive which was approved in China at 2014.
Take advantage of the empire’s connection
Now that Alibaba’s financial services company, Annette Financial, holds 30% of the bank, the private bank wants to take advantage of its connection to the empire of known billionaire Jack Ma, Alibaba’s Founder and Executive Chairman.
MyBank wants to offer its services to more than 10 million small merchants using Alibaba’s online trading platform, said Huang Hao, president of the online bank in an interview last week.
According to Huang, MyBank wants to add between 70 to 80 million small business owners in China to its circle of customers which most of them don’t have access to banks today because they cannot deposit any securities in advance.
“We are in a different stratum from the traditional banks,” said Huang, former head of the electronic banking division of China Construction Bank. “We are like capillaries reaching every part of the society. It could be a small restaurant, a breakfast stand, no other financial institution would have served them before.”