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People's Daily Online>>China Business

Home credit helps drive to consumer society

(China Daily)

13:35, December 03, 2011

PRAGUE - The Chinese government wants its people to spend more and save less so the nation can become a consumer-driven society and less dependent on exports.

For that to happen, domestic consumers need to be confident enough to spend more on TVs, laptops, mobile phones, motorcycles and other goods.

A central European company is playing a major role in creating a consumer finance industry to provide people with capital to spend.

PPF Group, the Czech financial and investment company that operates through its subsidiary Home Credit, is the only foreign-owned company to be given a license to provide small loans in China. It is offering average loans of 2,050 yuan ($322) available at 10,500 point-of-sale outlets across the country. The company has developed links with leading Chinese home appliance and electronic retailers such as Gome Electrical Appliances Holding Ltd, Suning Appliance Co Ltd and many other stores.

Pavel Vyhnalek, group chief executive of Home Credit Asia, believes offering such credit to consumers will make them more confident of handling debt.

"Our customers are ones that don't have any banking experience. If they use banks it is just for withdrawing savings," he said. "If they use finance for small-ticket items it will be part of their education when they later apply for bigger-ticket items such as a car loan or a mortgage."

Home Credit China, which began operations in the country in 2007, has 3,500 employees and has so far provided 1.3 million loans.

Its customers are mainly young, with some 80 percent aged between 20 and 35 years.

The company is one of the four outfits, the others being Chinese, to be given a license by the China Banking Regulatory Commission (CBRC) to operate a consumer finance company. It has a license to operate in the northern coastal city of Tianjin and is able to operate under a trust arrangement in other areas of the country, including Guangdong province and the municipality of Chongqing. However, Home Credit is keen to operate nationally, and the CBRC is currently reviewing licensing arrangements.

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Leave your comment2 comments

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PD User at 2011-12-0474.177.64.*
What is the point if China does not buy local? This is a bad idea, pushing consumerism which got the west in a bind.
Ali at 2011-12-0397.117.246.*
China hasn"t learned anything by dealing with the capitalist world. Turning its population into capitalist "consumers" will ensure a quick and speedy collapse of an already failed experiment. Good riddance.

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