Vendors of eBay to get credit via tie-up
Print Edition
Ping An Financial Technology Consulting Co said yesterday it has tied up with eBay to offer credit to vendors of the US e-commerce company as it taps the market for financing to small- and medium-sized businesses.
The company, part of China’s second-largest insurer Ping An Insurance Group, will extend as much as 1 million yuan (US$161,290) in loans to each individual vendor based on the credit rating and transaction record they have on eBay.
The interest rate will be between 16.5 and 20 percent annually, according to Ping An. Financial institutions are allowed to charge corporations up to four times the loan rates. The one-year benchmark loan rate is 6 percent.
Online vendors will enjoy a simplified application procedures and Ping An Bank will issue the loans according to the business needs of each individual vendor.
Ebay China’s transaction size is worth several billion US dollars, according to John Lin, head of eBay China, including Hong Kong and Taiwan.
But he didn’t disclose how many vendors are expected to receive credit from Ping An.
Alibaba, China’s largest e-commerce group, also provides credit to more than 200,000 small and micro businesses by the end of 2012 through its finance subsidiary.
Collaborating with China Construction Bank and the Industrial and Commercial Bank of China, Alibaba offers interest rate at around 18 percent per year through its finance unit.
Small business owners, especially online vendors, face difficulties in trying to get loans for their operations because they lack proper financial collateral.
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