[Economic Observation] Internet companies cannot turn inclusive finance into universal lending
Recently, two video advertisements of JD Finance that were suspected to belittle migrant workers and induce them to open JD gold bullion loans were condemned. JD Finance had to apologize.
Earlier, some media reported that young people who opened consumer credit products such as Huabei, Boraibe, and Baitiao could easily achieve "one-click activation, first consumption, then repayment".
Young people who are relatively impulsive, have poor self-control, and lack resistance to temptation, especially college students who have not been involved in the world, may fall into a predicament of insolvency.
Behind these two hot news is that some Internet companies are rushing to "harvest" groups such as migrant workers and college students that are difficult to cover by traditional financial institutions to increase credit growth.
However, these groups have low incomes, and some even lack the ability to repay. They are prone to bad debts and risk.
This has to make people wary: Internet companies cannot turn inclusive finance into universal lending.
I don’t know when, people are surprised to find that almost all the Internet companies they know around are doing credit: Ants have Huabai and Borrowing, JD.com has white bars and gold bars, Didi has Dishuidai...These companies rely on previous accumulations. The traffic advantage has enhanced the availability of finance, increased coverage, and expanded application scenarios.
However, there are also individual Internet companies under the banner of inclusive finance, blindly pursuing "universal" but neglecting to control risks.
Guo Wuping, director of the Consumer Protection Bureau of the China Banking and Insurance Regulatory Commission, recently wrote that compared with licensed financial institutions, financial technology companies rely more on shopping, transaction, logistics and other behavioral data, and rely more on the borrower’s consumption and repayment willingness. Lack of effective assessment of repayment ability often results in excessive credit extension.
Investigate the reasons why Internet companies pursue "universal" credit. On the one hand, financial technology companies born out of Internet companies are still using Internet thinking to operate platforms, pursuing market share, and always want to increase the number of users.
Therefore, irregular marketing behaviors and even inducing advertisements will appear.
On the other hand, because money is relatively easy and fast, these companies with a large number of users have a strong urge to monetize traffic.
The data mentioned in Guo Wuping’s article shows that in joint loans to individuals and small and micro enterprises, more than 90% of the funds come from the banking industry. Fintech companies take advantage of the advantages of guiding customers and directly collect fees that account for customer financing. About 1/3 of the cost, plus the fees charged by agency sales or other excessive credit enhancement products, are often as high as 2/3.
The terrible thing about excessive pursuit of "university" and turning inclusive finance into universal lending lies in the lack of awe of financial risks, which may make some low-income groups and young people fall into debt traps.
At the same time, the incentives and stimulus that some Internet companies pursue when they are "general" will also encourage irrational consumption of some people and distort people's values.
Inclusive finance is by no means universal lending. "Universal" is certainly important, but appropriateness and effectiveness are even more important.
It's not about whoever needs to borrow money, but also to assess whether they have the ability to repay and whether they will use the money for legitimate needs.
The just-concluded Central Economic Work Conference proposed that financial innovation must be carried out under the premise of prudential supervision.
The origin of finance is to serve the real economy, not a means for some Internet companies to monetize.
To rectify the excessive pursuit of "generalization" requires Internet companies to change their operational thinking and improve their risk control level with awe of financial risks.
More need for the intervention of supervisory hands.
The "Interim Measures for the Management of Online Microfinance Business (Draft for Comment)" issued not long ago set out detailed regulations on the risk control system, single account limit, information disclosure and other issues in the operation of microfinance companies. The overall threshold of the loan amount.
Supervision is tightening, and the trend of Internet companies' general lending is expected to stop.
Du Xin