Alibaba Group, China's biggest e-commerce company, on Thursday announced the consolidation of its four financial services units into one firm, with stated goals of providing loans to more cash-strapped small businesses and further optimizing its online payment tools.
The still-unnamed firm's CEO will be Peng Lei, the Chief Personnel Officer of Alibaba.
Alibaba provides two main financial services, a PR representative told the Global Times Thursday. One allows users of its online payment tool Alipay to use credit for amounts ranging from 200 yuan ($32.16) to 5,000 yuan, while the other provides loans to small firms.
Ma Yun, chairman of the group, said in an e-mail to internal staff Thursday that the company plans to provide financial services with a true focus on small and micro-sized businesses.
These businesses have a hard time getting loans from banks due to their smaller capacity. Despite government efforts, small enterprises seeking loans under 1 million yuan may have trouble finding banks willing to work at that scale, Guo Guangchang, president of Fosun Group and a member of the 12th National Committee of the Chinese People's Political Consultative Conference, said Thursday.
At present, the group's lending operations are supported by four fund resources: financing from banks, asset-backed security, and two credit firms in Zhejiang and Chongqing, the representative said, adding that a total of 129,000 firms got financial services from Alibaba with loans reaching 26 billion yuan by June 2012.
He added that with the new firm's establishment, Alibaba hopes to see more cooperation with banks.
The consolidation of its financial services will help the group make money from its large user database, which records consumers' online shopping habits as well as sellers' major commercial information such as transaction volumes, Wang Tingting, an analyst with iResearch, told the Global Times.
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