Pintec Academy did an in-depth research on current financing issues faced by SMEs. We find out that the development of digital lending might be a good way to address these issues.
The report by Pintec Academy analyze the application of digital lending in different fields including payment, e-commerce, tax and logistics as well as the benefit, convenience and challenges it has brought to the SME financing
The cooperation between banks and fintech companies is providing SMEs with a simple and efficient access to credits as well as better experience and higher availability to get financing.
Collected data for digital lending is mainly from four key scenarios including e-commerce, aggregate payment, taxation and logistics, which requires strong capabilities of risk management, cost and traffic control.
Among the SME digital lending business, the e-commerce loan is the earliest scenario with relatively mature development.
With the development of domestic e-commerce business, e-commerce platforms have gathered a large number of small and micro-sized enterprises, and accumulated small and micro-sized enterprises operation data, such as their transactions and scales, and relevant information of business owners. These data have become the important source for credit evaluation of e-commerce merchants, helping them obtain more credit qualifications from mainstream financial institutions.
The aggregate payment, an extension of e-commerce and the third-party payment platform, has brought digital lending to offline scenarios specially to serve offline self-employed merchants. The risk management model needs to be updated and adjusted time to time to ensure a reasonable credit line for different merchants.
Furthermore, China's vast market has brought enormous opportunities for the development of the logistics industry. Currently the main logistics financial service model is mortgage. By leveraging artificial intelligence and big data technology, credit loans are already being gradually explored as a service model, propelled by the demands of small and medium-sized logistics enterprises for short-term capital flow.
With the digitalization of tax data in recent years, players such as banks, taxation authorities, fintech companies, and digital invoice cloud platforms have joined the market. Based on their own advantages, these players have been serving small and micro-sized enterprises in different dimensions.
Overall, digital lending is one of solutions for the SME financing. Currently it only covers a small part of SMEs. The SME financing issue cannot be totally solved by financial technologies, it requires efforts from different parties including regulators, industry players and academic researchers. With more and more business data accessed and visualized online, fintech is a key driver to support the development of financial inclusion by leveraging advanced technologies to realize smart review and approval for credits.
Please click the link below to access the report for details.