B2B Payments

Investors Place Confidence In China’s Alt Lending Market

While alternative lending in the U.S. and throughout Europe has secured significant backing from venture capitalists, in China, the market is largely led by Alibaba through partnerships with alt lenders abroad to boost small, domestic suppliers.

But China’s turn for an alternative finance boom could be fast approaching. Investors have provided $84 million to alt lending startup Jimubox, which offers a platform for small business lending between Chinese backers and borrowers.

The Series C funding, announced by Jimubox on Friday (April 24), was led by Investec Bank, based in the U.K. “We have been following the developments of the Chinese financial sector closely, and we have looked for ways to participate,” Investec Capital Markets CEO and Director Richard Forlee said. “Given our banking experience, we were impressed by Jimubox’s understanding and management of credit risk.”

Forlee added that he believes Jimubox could soon be the leader of China’s P2P finance market. Other investors included Haitong Kaiyuan Investment Co., Mandra Capital and Zhong Capital Fund, as well as backing seen from existing shareholders.

Jimubox is perhaps best known for providing its investors, nicknamed the Jimu Jury, with data that cannot be published on its site, an effort to boost its transparency with backers and protect their investments. The company also reportedly offers three layers of investor protection, including third-party credit enhancement, cash-based security deposits and a mutual risk protection mechanism.

Financial backing of Jimubox comes as the China Banking Regulatory Commission has requested that major financial institutions in the nation increase their lending to small businesses in efforts to promote economic growth. Reports released last month revealed that mainstream banks provided nearly one quarter of business lending in 2014, but authorities are pushing for more lenient repayment rules and increasing their credit line offerings with small businesses in particular.

Statistics revealed that China’s economy grew at its slowest pace in two decades in 2014.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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