Alibaba Group Holding’s finance arm will launch its private bank by June this year, Yu Shengfa, vice president of the Alibaba affiliate, says during a press event today.
“We have submitted required reports to authorities in March,” Yu says. “We expect to open the bank in May or June.”
Zhejiang Ant Small & Micro Financial Services Group, which processes e-commerce payments and is crucial to Alibaba’s operations, won approval to set up a privately owned bank in September. The bank will be 30% owned by Ant Financial. Shanghai Fosun High Technology will own 25%. The rest will be taken up by private investors including a subsidiary of Wanxiang Group and Ningbo Jinrun Asset Management.
Separately, Yu announced that the financial affiliate has won a 500 million yuan loan from the International Finance Corporation. The money will be used to expand lending to female entrepreneurs. Goldman Sachs, which is also part of the deal through its 10,000 Women initiative, estimates that female entrepreneurs in China face a financing gap of $25 billion.
“ Chinese female entrepreneurs are very cautious,” Yu says in response to a question from Forbes. “They don’t want their companies to get too big, but such small companies have a lot of difficulties in obtaining loans from banks.”
The deal comes as Alibaba is expanding its reach to small- and medium-sized companies in China. Ant Financial has said that it wants the private bank, to be headquartered in Hangzhou, to focus on deposits of less than 200,000 yuan and loans under 5 million yuan as part of the support for groups underserved by China’s state-owned financial institutions.
The government in Beijing is also stepping up support for SMEs. China’s central bank, the People’s Bank of China, has cut reserve requirement ratios of banks that give sizable loans to the rural sector and small businesses.
Ji Min, an official with the PBoC, says financial support for SMEs run by female entrepreneurs lags behind.
“This is very much a blank area,” he says at the event. “It has a lot of potential.”
