Qudian is a Chinese online micro-lender that aims to make personalized credit more accessible that’s caused quite a stir on the stock exchange this year. One of the countries leading providers rose around $900m (£682m) when it priced its US initial public offering at a staggering $24 per share.
The company mainly focuses on providing small, short-term loans for the younger generation. Qudian was founded back in 2014, but despite it being early days, the company’s off to a flying start. According to Qudian’s listing documents it had over 47 million registered users with over 5 million active borrowers. Being a digital only platform, the company sells most of its loans through its mobile site. The average loan taken out on the site takes just seconds to approve and is usually between $136 and $184 on average. In just the first half of 2017 Qudian’s profit was $143.6m.
In China, not many people have credit cards; instead technology based financial services such as mobile payments are the norm. The value of both mobile and online third party payments grew significantly over 3 years from $1.12 trillion in 2013 to more than $8 trillion in 2016. The company are very big on transforming the overall consumer finance experience in China and use big-data technologies such as artificial intelligence (AI) and machine learning in which to do so. Shying away from traditional lending stipulations that most banks have, Qudian uses data technology and operating efficiencies to take a different perspective on borrowers in regards to both their willingness and ability to pay.
One of the Qudian’s principal shareholders is Alibaba, who just happens to run the biggest mobile payment platform in China, Alipay. Through this partnership, all the loans are paid into Alipay accounts and repaid in the same way also. The company uses machine learning techniques in which to analyze data input by customers and asses their creditworthiness. For this reason, Qudian claims to be an innovator in integrating AI into financial applications.
You can be sure we’ll be hearing much more of Qudian in the future. With a target market of young people and the ability to service their needs at their fingertips in seconds, how can it go wrong?
Original source BBC