Data bonus for small firms

Small and medium-sized enterprises (SMEs), by adopting the latest technology, are amassing a wealth of invaluable data which will be conducive to the country’s inclusive finance industry, a recent forum heard.

China boasts around 28 million such enterprises, which account for over 80 percent of overall employment and contribute more than 60 percent of GDP.

However, these smaller players find it difficult getting loans compared to large-scale state-owned enterprises.

To help resolve their funding difficulties, Liu Kegu, deputy director at the academic committee of the China Center for Economic Exchanges and team leader for the inclusive finance commission at the China Association for the Promotion of Development Financing, called for comprehensive utilization of such companies’ credit information.

Though SMEs lack mortgages, guarantees and financial statements, they do have their credit, their capabilities in managing operations and their cash flows, Liu said.

Tang Ning, founder and chief executive officer at Chinese financial technology conglomerate Creditease, said small firms were becoming the new drivers for China’s transformation toward a more digitalized economy.

Tang said that data, as an invaluable asset, is pushing the development of the country’s inclusive finance sector, which is beneficial to small firms.

SMEs have a mass of data about their daily operations, which can become precious credit data and help them seek more funding at a lower cost.

To resolve the thorny problem of so-called “information asymmetry” between small companies and financial institutions, Creditease has partnered with 2Dfire.com, aiming to access more quality potential clients.

2Dfire.com is a Hangzhou-based technology company focused on offering smart solutions for the catering and retail industry, and has provided transaction and management systems and IT and marketing services for over 400,000 eateries.

Creditease said that, by using data, it will be able to offer customized solutions for SMEs while having a better control of its risks by relying on technologies such as artificial technology and machine learning.