Collateral-free credit to boost consumer demand
By Zhang Fengming |
December 2, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S first foreign-owned consumer finance company started operations in Tianjing Municipality yesterday under a national plan to encourage domestic consumption as part of an economic restructuring.
Home Credit Consumer Finance Co, with a regulatory minimum registered capital of 300 million yuan (US$45 million), was set up by PPF Group NV, the largest privately-owned investment group in Central and Eastern Europe.
Home Credit will provide Tianjin consumers with a range of products to support "installment sales in shops" and also with loans to finance purchases of durable goods, education or travel. It will also offer non-collateral loans.
Home Credit is one of four consumer credit firms allowed by the China Banking Regulatory Commission to test the water for a new form of financial services in the country.
The other three firms are Chinese-owned. A similar company has been set up in Shanghai by Bank of China, Shanghai's Bailian Group and Lujiazui Finance Development Co. Bank of Beijing and Bank of Chengdu have also gained approval to set up similar credit companies in their cities.
Lu Zhengwei, Industrial Bank's senior economist, said earlier that consumer credit is a significant step to boost domestic demand as China seeks to improve its economic structure.
China's 12th Five-Year Plan, which ends in 2015, seeks to shift its growth engines from exports and investments to domestic demand.
Consumer credit firms offer quick, short-maturity, small-sum loans to consumers to help them buy home appliances or for other needs without the need for collateral.
Some banks offer non-collateral loans at high rates. Consumer credit companies will be able to offer bigger loans at lower interest.
Home Credit Consumer Finance Co, with a regulatory minimum registered capital of 300 million yuan (US$45 million), was set up by PPF Group NV, the largest privately-owned investment group in Central and Eastern Europe.
Home Credit will provide Tianjin consumers with a range of products to support "installment sales in shops" and also with loans to finance purchases of durable goods, education or travel. It will also offer non-collateral loans.
Home Credit is one of four consumer credit firms allowed by the China Banking Regulatory Commission to test the water for a new form of financial services in the country.
The other three firms are Chinese-owned. A similar company has been set up in Shanghai by Bank of China, Shanghai's Bailian Group and Lujiazui Finance Development Co. Bank of Beijing and Bank of Chengdu have also gained approval to set up similar credit companies in their cities.
Lu Zhengwei, Industrial Bank's senior economist, said earlier that consumer credit is a significant step to boost domestic demand as China seeks to improve its economic structure.
China's 12th Five-Year Plan, which ends in 2015, seeks to shift its growth engines from exports and investments to domestic demand.
Consumer credit firms offer quick, short-maturity, small-sum loans to consumers to help them buy home appliances or for other needs without the need for collateral.
Some banks offer non-collateral loans at high rates. Consumer credit companies will be able to offer bigger loans at lower interest.
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