There is a new addition to the Chinese financial market as the US company, ZestFinance, is pushing into the market, according to the latest China insights. The firm has combined forces with JD.com, the number two e-commerce platform in China. The two companies are going to look at the risks associated with lending to consumers and businesses throughout China. Right know the two are being known as JD-ZestFinance Gaia.
The two companies are going to help each other. ZestFinance looks at the non-traditional data in order to confirm if a person is a risk for borrowing money, if the person could repay what they are asking to borrow. They will also utilize the online shopping habits of potential borrowers, based off of data that JD.com provides. JD.com has over 105 million active users, so obtaining shopping data should not be difficult.
Over time, the two plan to sell to other parities. Right now, there have been no disclosures of how much money is being put up front by each company in order to start this venture. The founder of ZestFinance, Douglas Merrill, stated:
“We’re trying to lay the foundation for future credit development in China.”
China has already stated they are planning to steer away credit and lending from those national chains and big companies in the market. Instead, they want to ensure the consumer has more power, and change the market for the better. This is just one step in this direction. Merrill went on to state:
“It’ll be a huge good for the world if we can help the government change its credit structure.”
JD.com has been extending lines of credit consumers since last year. However, they hope that with combining with ZestFinance they will see better results. According to Josh Gartner, a spokesman for JD.com, stated:
“So far we’ve used different measures to evaluate creditworthiness, but this will be a much stronger tool.”
At this point, the main competition that JD.com and ZestFinance will be facing is the Tencent and Ant Financial combination.