Alibaba’s co-founder is ‘giving’ 3-minute loans

NEW DELHI: Jack Ma’s changing the way China lends to small businesses. His four-year-old MYbank has lent 2 trillion yuan (Rs 20.02 lakh crore) to nearly 16 million small companies, which had been shunned for decades in favour of state-owned giants. Borrowers apply with a few taps on a smartphone and receive cash almost instantly if they’re approved. The whole process takes 3 minutes and involves zero human bankers. And the default rate so far? About 1%.
China is quickly becoming a world leader in the use of big data and AI technology to make loans. That’s because among the country’s biggest advantages is the more relaxed approach toward privacy than many other jurisdictions. And the biggest data trove may come from payments providers like the one operated by Ma’s Ant Financial — MYbank’s biggest shareholder. After obtaining authorisation from borrowers, MYbank analyses real-time data from payment systems, social media and other sources and a risk-management system that analyses more than 3,000 variables to gain insights into creditworthiness.