Liu Minxia

    mllmx@msn.com

    WIDE and clean roads, row upon row of glittering high-rises, a stylish shopping mall and a five-star hotel at a corner of the Houhai area in Nanshan District give the signs of an emerging business center in fast-paced Shenzhen.

    Unlike in the long-time city center of Futian, where established banks, insurers, and international companies dominate, office buildings here house a large percentage of small but fast growing companies, and WeLab is one of them.

    With 160 employees, whose ages average 27 years old, in the Shenzhen office, the P2P (peer-to-peer) lending company targets tech-savvy young consumers, mostly college students and those who have just graduated, the age group who are mostly shunned by traditional banks, Alex Chen, general manager for WeLab’s China division, said in an interview yesterday.

    Established in Hong Kong in 2013, WeLab is riding on a P2P lending boom that has seen China becoming the largest P2P market with 1,600 P2P platforms and a turnover of 250 billion yuan (US$41 billion) by the end of last year, statistics from the Internet Society of China have shown.

    The fast growth continued into this year. Turnover on the country’s P2P platforms reached a record high of about 115 billion yuan in September, according to Online Lending House, a domestic portal that tracks the country’s P2P sector. That is 18 percent higher than in August and more than four times what was recorded a year earlier, it said in a report.

    Chosen earlier this year by The Wall Street Journal as one of the startups that are worth paying attention to, WeLab also grew by leaps and bounds. Since Chen joined the company at the beginning of the year, the loan applications have retained a monthly increase speed of 100 percent, the number of users has exceeded 1.25 million and the applied loans exceeded 2.8 billion yuan. It has also raised a US$20 million Series A from TOM Group, a Hong Kong-listed media company that is 36.7 percent-owned by Li Ka-shing’s flagship conglomerates Hutchison Whampoa and Cheung Kong and Silicon Valley’s Sequoia Capital.

    A former commercial banker with 25 years of experience at Visa and China Resources Bank in Taiwan and on the Chinese mainland, Chen said he smelled the opportunities for Internet finance years ago. “The following 10 years will witness the explosive growth of the consumer market as well as Internet finance,” said Chen. Direct banking, as manifested by the newly established WeBank, which conducts all banking services online, according to Chen, will sweep China’s banking sector.

    “Even before WeBank was conceptualized, we planned for something like that through cooperation between China Resources Bank and Tencent Technologies,” Chen said. “It was a pity that the plan was shelved due to changes to the top management at China Resources.”

    Wooing the demand of young borrowers, who want to avoid having to go to a bank branch and avoid being subjected to cross-selling, WeLab does everything online: receiving loan application, assessing credit and giving out loans.

    It has its own risk-control software, WeDefend, which has enabled the firm to conduct rapid credit assessment within three hours of application, issue loans within 24 hours and realize a default rate of less than 1 percent, according to Chen. The software relies on information provided by the customers as well as big data found online, according to Chen.

    With more than 30 million college students in China and even more who have just graduated, Chen said WeLab is aimed at expanding its customer base in the future to groups that are neglected by traditional banks, like rural borrowers.

    When asked about China’s slack regulation of the P2P sector, Chen said it take regulators’ courage and wisdom to allow the market to evolve before giving a guideline. “No country in the world had experience with P2P, and it was courageous and wise for Chinese regulators to wait and see before it started regulating the market,” said Chen.