Yesterday evening, the Chongqing Agricultural Commercial Bank announced that the bank and Xiaomi Communications Technology Company (Xiaomi Communications for short) and other relevant parties to establish the Chongqing Xiaomi Consumer Finance Company (Xiaomi Consumer Finance for short) have been approved by the Banking Insurance Regulatory Commission.
The announcement also confirmed the shareholding structure of Xiaomi Consumer, with a registered capital of 1.5 billion yuan. Among them, Xiaomi Communications invested 750 million yuan, holding 50% of the shares; the Chongqing Agricultural Commercial Bank invested 450 million yuan, with a shareholding ratio of 30%.
Join hands with Xiaomi
Set up a consumer finance company
The Chongqing Agricultural Commercial Bank announced that after review and approval by the board of directors, the bank signed the “Chongqing Xiaomi Consumer Finance Co., Ltd. Investment Agreement” with Xiaomi Communications, Chongqing Jinshan Holding Group, Chongqing Dashun Electric Group, and Chongqing Jinguan Jielai Hardware, Mechanical and Electrical Market Co., Ltd. on October 16, 2019, to jointly fund the establishment of Chongqing Xiaomi Consumer Finance Co., Ltd. to carry out consumer finance related business. Among them, Xiaomi Communications is a company under the Xiaomi Group.
Specifically, the planned business scope of Xiaomi Consumer Finance mainly includes issuing personal consumption loans, accepting deposits from domestic shareholders' subsidiaries and domestic shareholders, borrowing from domestic financial institutions, issuing financial bonds with approval, domestic interbank loans, consulting and agency services related to consumer finance, agent sales of insurance products related to consumer loans, fixed income securities investment business, etc. The details shall be subject to review and approval by the banking insurance regulatory department.
Earlier, on January 17, the Banking Insurance Regulatory Commission issued an announcement stating that it agreed to Xiaomi Communications to establish a consumer finance company in Chongqing. As early as November 2019, the Chongqing Banking Insurance Regulatory Bureau approved approval for the Chongqing Agricultural Commercial Bank to participate in the establishment of Xiaomi Consumer Finance. This will be the second licensed consumer finance company to land in Chongqing. Immediate Consumer Finance, which was previously co-sponsored by Chongqing Department Store and Bank of Chongqing, was formally established in June 2015.
The Chongqing Agricultural Commercial Bank said that the current investment capital is the bank's own funds and will not have a significant impact on capital adequacy and other financial indicators.
Internet giants have been laid out one after another
According to an announcement from the Banking Insurance Regulatory Commission on January 17, Xiaomi Communications should strictly comply with the requirements of relevant laws and regulations to review shareholders' qualifications and handle construction matters, and complete construction work within 6 months from the date of approval. The preparatory work for Xiaomi Consumer Finance is subject to supervision and guidance from the Chongqing Banking Insurance Regulatory Bureau, and no financial business activities are allowed during the preparation period. After the preparatory work is completed, an application for opening a business shall be submitted to the Chongqing Banking Insurance Regulatory Bureau in accordance with relevant regulations and procedures.
In recent years, the consumer finance industry has grown rapidly, and Internet giants have entered the market one after another. In 2019, Li Ali, Tencent, Baidu, Weibo, and Ping An entered the consumer finance market successively. Prior to Xiaomi Consumer Finance, Ping An Consumer Finance and Everbright Consumer Finance had been approved by the Banking Insurance Regulatory Commission in November 2019 and January 2020, respectively.
Industry insiders believe that consumption is gradually becoming the main driving force for economic growth, and that consumer finance, which stimulates the “blood” of consumption, is also within the scope of policy incentives. Coupled with the background of opening up the financial industry to the outside world, many of the giants that have invested in or set up consumer finance companies are connected to the consumption scenario and have huge traffic advantages. The consumer finance industry is expected to welcome more giants in the future.
According to statistics from the China Banking Association, as of the end of September 2019, there were 24 licensed consumer finance companies in China, with assets of 493.8 billion yuan and loan balances of 460.4 billion yuan.