Ant Credit, an Alibaba Group-affiliated company that provides micro online loans to small businesses, is set to receive a RMB 500 million ($80 million) senior loan through International Finance Corp. (IFC) to expand financing for women entrepreneurs in China.
Announced during a press conference in Beijing today, the loan is the centerpiece of a strategic partnership aimed at boosting economic opportunities for women and small businesses between Ant Credit’s parent, Ant Financial Services Group; IFC, a member of the World Bank Group; and the Goldman Sachs 10,000 Women Initiative, which provides underserved women around the world with business education and mentoring.
Funding will come directly from the Goldman Sachs 10,000 Women/IFC Women Entrepreneurs Opportunity Facility, according to a press release issued by the partnership.
In the release, the members of the partnership called their effort the “first Internet-based gender-finance program in China.” Ant Credit vets the creditworthiness of small-business borrowers based on data gleaned from their online transactions and behavior.
Ant Credit plans to use the new funding so that women small-business owners, who often face difficulties getting loans from conventional lenders in China, can finance their online businesses. Ant Financial is related to e-commerce giant Alibaba Group, which among other Internet businesses runs China’s largest online-shopping platforms Taobao Marketplace and Tmall.com.
“Women are crucial to China’s economic development,” said Lucy Peng, CEO of Ant Financial Services Group, in a statement. “We have seen multiple successful stories of women entrepreneurs on our platforms and would like to support them by providing the resources they need to grow their business. By collaborating with IFC, we are able to expand our services to more women, empowering them to pursue their career goals and reach their potential.”
Many of Ant Credit’s existing clients are women who run businesses on Taobao and Tmall. Ant Credit officials estimated that half of women-owned businesses active on those market places are eligible for micro loans from Ant Credit.
Among Taobao entrepreneurs who have tapped Ant Credit for funding is Ding Qinyan, an engineering graduate from Zhejiang University of Technology who runs a thriving online apparel business with her fiancé.
When she started her company in 2010 with just RMB 3,000 ($480), Ding says she sought start-up financing from banks but was rejected because she had no collateral. Instead she turned to Ant Credit — then known as Alibaba Group’s Ali-Loan program — and was able to borrow a few thousand RMB to buy inventory.
Today, she has 30 employees, two shops on Taobao and one on Tmall, and is eligible to borrow up to RMB 500,000 ($80, 000). “It makes no difference whether you are a man or a woman when you open a shop on Taobao,” Ding said. “Men and women are equal, and girls should be independent.”
Ding was able to get financing from Ant Credit because of the company’s unusual use of Internet data to determine creditworthiness, which allows it to lend without requiring collateral and to make smaller loans—thereby expanding its universe of potential borrowers. As of March 31, 2014, Ant Credit had loaned RMB 190 billion ($30.4 billion) to more than 700,000 small and micro-businesses.
“Internet technologies can simplify lending procedures and make loans more accessible and affordable for smaller businesses,” said Jin-Yong Cai, IFC’s executive vice president and CEO, in a statement. “Expanding such financing is critical to achieving the World Bank Group’s goal of universal access to financial services by 2020.” IFC last year loaned RMB 1 billion ($160 million) to Ant Credit to improve access to financing for Chinese businesses.