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June 13, 2010

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Credit company in city debut

SHANGHAI'S first consumer credit company was announced yesterday.

The BOC Consumer Finance Co, with a registered capital of 500 million yuan (US$73.17 million), will offer quick, short-maturity, small-sum loans to consumers for purchases other than apartments or cars.

"The firm will deliver a boost for young, cash-strapped people in need of small loans," said Zhang Tao, deputy general manager.

Consumers will find it easier to access credit compared with traditional bank loans, because they just need to prove they have a stable job and source of income.

"It will take less than 60 minutes to get a loan under normal circumstances," Zhang said. A client can borrow up to five times their monthly income but no more than 100,000 yuan.

Interest will be calculated on a daily basis. The interest rate will vary according the borrower's credit status.

"Many people may prefer bank credit cards for its interest-free period," Zhang said. "But the new credit will be a good complement when consumers' needs exceed their credit card line or when they need a loan badly."

The firm will launch officially in the Shanghai No.1 Yaohan Department Store (Nextage) next month after a trial run allowing locals to use credit in the store.

The company, established by the Bank of China, Bailian Group and Lujiazui Finance Development Co, is among the country's first batch of consumer finance companies approved last July by the China Banking Regulatory Commission.


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