The Alibaba affiliate Ant Financial has officially launched its Internet bank, MYbank.
Reuters reported yesterday (June 25) that the online bank that’s aimed at assisting SMEs in China has kicked off business with roughly 4 billion yuan ($644 million) of capital to help shell out loans. This move by Ant Financial into the Internet-based financial institution space shows how the industry is undergoing a shift by challenging traditional banks to offer small and micro loans.
The loans offered to SMEs will be up to 5 million yuan ($805,503). An Ant Financial spokesperson told Reuters that the Internet bank will be able to take deposits eventually, but not until Chinese regulators give the green light on the facial recognition tech it’s looking to use to remotely access bank accounts.
“MYbank is here to give affordable loans for small and micro enterprises, and we are here to provide banking services, not for the rich, but for the little guys,” Eric Jing, Executive Chairman of MYbank, told Reuters.
MYbank will be 30 percent owned by Ant Financial, which is controlled by Alibaba head Jack Ma and other Alibaba executives. Significant MYbank stakes will also be held through Fosun International and Wanxiang Group. Those two companies will have respective 25 percent and 18 percent stakes through subsidiaries.
Ant Financial’s entrance into the online banking industry pits Alibaba’s financial arm against its rival Tencent, which rolled out testing of China’s first online bank, WeBank, in January. As part of WeBank’s test run, the bank said employees of its stakeholders — which include Tencent, Shenzhen Baiyeyuan Investment and Shenzhen Liye Group — were able to open accounts, deposit money and, in some cases, take out loans.
In January, Ant Financial also rolled out its new credit-scoring service Sesame Credit, which combines “big data” technology and customer behavior analytics to help make credit more available to millions of Chinese consumers. The company plans to use this service to help process loans for its MYBank customers, too.