Alibaba said on Monday (Feb. 17) that ㍐20 billion ($2.86 billion) is available in loans via its affiliate, Ant Financial’s MYBank, to help companies affected by the Coronavirus, Reuters reported, citing an announcement on Alibaba’s official Weibo account.
In addition, Alibaba is extending preferential terms to firms located in Hubei — the center of the outbreak — and setting aside ㍐10 billion in loans just for companies in that region. They will be offered a zero-interest rate on 90-day, one-year loans and a 20 percent discount on rates for the remaining nine months. All Chinese businesses are being offered ㍐10 billion in 20 percent discounted one-year loans.
Chinese officials have been encouraging financial institutions to drop interest rates and offer loans to companies that have been affected by the outbreak.
The Chinese eCommerce giant is also dropping platform fees for Tmall merchants for the first six months of 2020. The company is also establishing two ㍐1 billion funds to assist restaurants, logistics and supply chain firms.
People returned to work across China on Monday (Feb. 17) as government restrictions were rolled back. The coronavirus has killed more than 1,300 people, most of them in mainland China.
China’s most valuable tech company is facing one of the biggest challenges in its 20-year history. Alibaba said last week that the coronavirus outbreak was slowing sales as employees stayed home from work and packages went undelivered.
“We are being tested,” Alibaba Chief Executive Daniel Zhang said Thursday.
Prior to the coronavirus hitting China in late January, Alibaba had beat analysts’ expectations. The company posted ㍐161.5 billion in sales in the quarter ending Dec. 31, an increase of 38 percent over the same period a year earlier.
In a recent earnings call about 2019 Q4, Alibaba indicated that the outbreak was going to negatively affect its revenue moving forward. Although demand has been up for goods delivered from places like supermarkets, stores were closed and delivery capacity was hindered.