At the Singapore Fintech Festival (SFF) on November 16, 2023. MYbank, a leading internet bank in China and an associate of Ant Group, showcased digital solutions with the goal of improving accessibility to financial services for small and micro-sized enterprises (SMEs) and the agricultural sector. The showcased solutions included Tomtit for rural finance, Goose for supply chain finance, and Lark for automated credit line management. These solutions were specifically designed to assist SMEs in overcoming financing barriers and enhance the accessibility of financial services for MYbank’s 50 million SME clients.
“MYbank specializes in SME financial services. Our financial technology solutions are designed to address the specific needs of our extensive and long-tail customer base,” said Hao Jiang, Vice President of MYbank, at the bank’s showcase during this year’s Singapore Fintech Festival.
SMEs account for approximately 90% of businesses globally and contribute to over 50% of worldwide employment, according to the World Bank. Despite their substantial presence, SMEs often face challenges due to limited access to finance.
MYbank has acknowledged the obstacles encountered by SMEs, which include limited coverage, depth, and accessibility of necessary financial services. Traditionally, SMEs were required to visit physical bank branches, provide extensive documentation, and endure lengthy approval processes for loans. More often than not, SMEs face difficulties obtaining the necessary financing support due to prolonged waiting time or a lack of collateral. As a cloud-native bank, MYbank has streamlined this process by adopting a fully online approach.
310 Lending Model
Through its mobile app and cloud-based infrastructure, MYbank is a pioneer of the “310 lending model”. This innovative model allows SME owners to secure collateral-free business loans with just a few clicks on their mobile phones. The entire application process can be completed within three minutes and approved within one second, which requires zero human interaction.
Tomtit System for Rural Finance
The limited availability of financial services in rural areas presents a significant challenge. Granting loans to farmers is hindered by various obstacles, such as insufficient information about agricultural output, extended growing cycles, high risks, and a lack of reliable collateral. As a result, determining appropriate loan amounts for rural farmers becomes a challenge, and also impedes the progress of agricultural development.
In 2020, Yang Zuobo, a 40-year-old farmer from China’s Jiangxi Province, took out his mobile phone and marked the perimeters of his paddy field on a digital map. Within minutes he managed to secure a loan to buy seeds, fertilizers, and pesticides.
This was made possible by MYbank’s “Tomtit” system, which utilizes satellite remote sensing technology to estimate the agricultural output of specific farmlands. It assesses potential credit risks more accurately, enabling the bank to make more informed credit decisions when farmers apply for collateral-free loans. In 2022, the system introduced additional features to identify cash crops such as oilseed rape and peanuts, as well as different forms of cultivation, such as greenhouses and orchards. According to Hao Jiang, 1.5 million growers in China have received online loans through MYbank’s Tomtit system by June 2023.
Goose System for Supply Chain Finance
SMEs both upstream and downstream in the supply chain of core enterprises often require financing support for various purposes, such as purchasing raw materials, fulfilling procurement orders, shipping goods, and disbursing employee salaries. Typically, when distributors and retailers apply for a loan, they are required to provide guarantees from their clients, usually major manufacturers, as well as collateral. As a result, only 30% of distributors and retailers are able to secure loans.
To alleviate the financing barrier for SMEs, MYbank introduced the Goose digital supply chain finance system, which incorporates technologies such as graph computing, multimodal recognition, blockchain, and privacy-preserving computation. With client authorization, MYbank can use alternative industrial information, such as order fulfillment history between SME suppliers and their clients, along with other supporting materials voluntarily uploaded by the SME suppliers, to provide collateral-free credit lines. Using the system, MYbank can offer credit lines to SMEs without requiring their client’s guarantee.
By the end of 2022, over 1,000 major brands, including China Mobile, Haier, and Mengniu Diary, have adopted the Goose system. As a result, SMEs within the supply chain of these brands experienced a significant improvement in loan accessibility, with an increase of up to 80%.
Lark System for Automated Credit Line Management
To make it easier for SMEs to manage their credit lines, MYbank introduced “Lark”, an AI-driven conversational risk control system.
Li Hua, a truck driver, submitted his loan request through the Lark system’s interactive program. Within seconds, he received a prompt: “What is the brand and model of your vehicle?” Li Hua stepped out of his truck, took a photo, and uploaded it. Another question followed: “What are you transporting?” Li Hua provided details, including pictures of the goods being transported. Thirty minutes later, Li Hua received a notification confirming a successful increase in his credit line at MYbank.
Lark functions as a 24/7 digital customer service manager, fully automating customer interactions and processing various types of information, including structured data like current accounts and bills, as well as unstructured content such as contract texts, store photos, and truck images. Through multimodal analysis, Lark accurately assesses customer needs and provides customized credit lines. As of September 2023, Lark had served over 8 million users with an average credit limit increase of RMB 45,000 per customer, said Hao Jiang.
Thanks to innovative risk-management technologies, MYbank successfully extended credit lines to SMEs while maintaining a controlled non-performing loan (NPL) ratio. According to MYbank’s 2022 annual report, the NPL ratio of SME business loans was 1.94% by the end of 2022, which was lower than the industry average of 2.18% at the time.
“MYbank has developed Tomtit, Goose, and Lark systems to help SMEs overcome the difficulties of traditional financing services, which are often slow, difficult, and expensive to obtain. This innovation enables MYbank to offer purely online financial services to more SMEs. In the future, AI and other technologies will increasingly reshape the financial sector, benefiting everyone in the process,” explained Hao Jiang.