Shenzhen OneConnect Intelligent Technology Co. Ltd (hereinafter referred to as "OneConnect") issued "The Reform of Financial Services in Small and Medium Enterprises and the Advanced Development of Fintech" (hereinafter referred to as the "White Paper"), the first White Paper on financial services for small and medium enterprises, at the Financial Sub-forum of the International Monetary Forum 2018 held on July 15. As the world's leading fintech service company, OneConnect has been focusing on empowering small and medium financial institutions via technologies. In addition, as a platform subordinating to OneConnect that focuses on solving the difficulty in applying for loans of small and medium enterprises, it pays attention to the present situation of financial services for small and medium enterprises and puts forward solutions jointly with OneConnect.
The bottleneck of financial services for small and medium enterprises remains to be broken through and the financing needs are difficult to be met.
The White Paper points out that small and medium enterprises play an important role in the national economy. The data show that the number of small and medium enterprises accounts for 99% of the total number of registered enterprises by the end of 2016, with the value created accounting for 60% of the national GDP, the amount of tax accounting for 50% of the total amount of the national tax, and more than 75% of urban employment opportunities being provided. Despite the huge number and the value mentioned above, the growth of the main business income of small and medium enterprises is lower than that of large enterprises. The profitability of small and medium enterprises are far from satisfying - the profit growth rate of small enterprises is only 10.6%, which is the slowest, while medium enterprises suffer the highest losses, with the loss rate of up to 12.9%.
What's more, small and medium enterprises also encounter difficulties in financing services, The balance of loans for small and micro-enterprises in China was RMB 30.74 trillion by the end of 2017, accounting for only 24.67% of the total balance of bank loans. According to statistics from MIIT, the financing needs of 33% of medium enterprises, 38.8% of small enterprises and 40.7% of micro enterprises in China cannot be met. Another data shows that the financing gap of small and medium enterprises in China is close to USD 1.9 trillion, with the financing gap rate of 43%, accounting for 17% of GDP. There is a total number of over 23 million of small and medium enterprises suffering from financing constraints, among which the proportion of small and medium enterprises with financing constraints is 41% and 42% respectively.
After in-depth investigation, the White Paper points out that the main difficulties in financing of small and medium enterprises lie in the following aspects: First, it is rather difficult to distinguish information of small and micro customers, which brings challenges to winning customers and risk management; second, customers' information is collected manually, which is low in efficiency, costly and makes it difficult to carry out risk management; third, the amount of single financing for small and medium enterprises is generally small, while the service cost is relatively high; fourth, the procedures are complex, the period for making loans is rather long and the service efficiency is unsatisfying; fifth, the loan amount of small and medium enterprises is relatively low yet the price is rather high; sixth, they are more easily to be influenced by the narrowing of margin and the competition among banks and the Internet finance, which makes it more difficult for small and medium banks to win customers. Therefore, small and medium enterprises are in the urgent need of personalized financial products, more flexible financial service means, integrated financial services and convenient financial service procedures to alleviate the financial service dilemma.
Empowered by fintech, OneConnect Gives Play to Its Cutting-edge Technological Advantages
In view of the disadvantages faced by the traditional financial institutions in the financial services for small and medium enterprises, the White Paper points out that the emerging financial technology has become a kind of revolution to the financial industry, and that the progress of technology has promoted the transformation of financial services. In this regard, the white paper prospectively analyzes the application scenarios of five technologies, including artificial intelligence, big data, blockchain, cloud computing and biometrics recognition in the services for small and medium enterprises, to support product innovation and the reform of financial services.
The White Paper believes that the development of fintech provides a new perspective for solving problems related to financial services for small and medium enterprises. With the application of cutting-edge technology in the financial field, new solutions for problems related to financial services for small and medium enterprises have emerged. In the process, OneConnect endeavors to promote the development of small and medium enterprises by making use of its own advantages in financial services. OneConnect believes that "ABCD" will be the decisive technologies for reshaping the entire financial industry - A refers to AI; B means blockchain; C is cloud computing; and D represents big data. Based on the world's top professional financial technology team and the rich financial technology practical experience, OneConnect has transformed the leading scientific and technological achievements in these fields into market-oriented products, which are applied to more financial scenarios.
At present, there is no specialized platform for financing for small and medium enterprises, so many small and medium enterprises can not obtain credit products that match their financing needs, nor can they get financial support in time due to the complex and time-consuming examination and approval process of banks. In view of this, the fintech service center for small and medium enterprises of OneConnect has launched Yiqiyin and Yiqiye, two major platforms, which share the core technologies, such as artificial intelligence, blockchain, cloud platform and biometrics recognition of OneConnect, to provide assistance for financial institutions and small and medium enterprises jointly with the aid of fintech. Yiqiyin serves financial institutions and Yiqiye, the enterprise-based version of Yiqiyin, serves small and medium enterprises. The combination of both is to solve financing bottlenecks faced by small and medium enterprises and empowering them.
Strengthen the Role of Strategic Enablers and Lead the Industry into the Smart Era
The empowerment of fintech has actually become a new kinetic energy that enables the financial industry to achieve comprehensive restructuring. In terms of future development trend, the empowerment of fintech will greatly enhance the application frequency of technology, and promote the continuous changes in financial services for small and medium enterprises. As a strategic enabler, OneConnect has rich experience in fintech practice in the industry, and thus can provide leading solutions for small and medium financial institutions.
With the publication of the White Paper and the increasing attention to small and medium enterprises of the whole industry, OneConnect as a fintech service company is always leading and will continue to lead the trend of the industry. In the future, it will continuously strengthen its role as a strategic enabler, and promote the entire financial sector to enter into the Smart Era.
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