Wu Shuang, researcher of 21st Century Asset Management Research Institute, and Chen Xianan, intern
The performance of small loan companies listed on the US stock market is clearly differentiated. Judging from the 2021 annual reports disclosed successively, 360 Digital, Lexin, Xiaoying Technology, and Xinye Technology have increased in revenue, profit, matching loan volume and loan balance; while Qudian, micro-loan network or revenue decline, or net loss; Rong360 has turned into a reverse flow institution.
From the perspective of the amount of loans promoted throughout the year, there are 3 companies with hundreds of billions of yuan, namely 360 Digital Science, Lexin, and Xinye Paipai Loan Technology, which are 357.103 billion, 213.8 billion and 137.4 billion respectively; and according to the financial report, Xiaoying Technology is 51.859 billion, and the others have not been announced.
The evaluation objects of this consumer financial product evaluation series are Xiaoying Technology, Qudian, 360 Digital, Micro Loan Network, Jianpu Technology, Yiren Jinke, Lexin, Xinye Technology, which are 8 financial technology companies listed on the US stock market, and the consumer credit business was or is still their main business.
This issue of evaluation is mainly based on the same conditions, that is, as a freelance worker, aged 25-30 years old, with an annual income of 100,000 yuan, no mortgage car loan under his name, and apply for a loan of 1,000 yuan on different lending APPS to see the real interest rate of different platforms. At the same time, it also pays attention to the latest progress and development of the above 8 enterprises in the consumer credit business.
Qudian and micro-loan network APP are no longer available, or the micro-loan business has been gradually divested
At present, there are two applications under Qudian in the application market, one is "Qudian", the developer is Xiamen Qudian Technology Co., Ltd., the official introduction is "financial open platform", which can "help partners quickly realize traffic realization", a total of 49 scores; the second is "to install", the official introduction is "credit loan low-interest installment loan app", the score is 17,000.
In this assessment, after many attempts, the members of the research group were unable to obtain loan services from "instalments".
The reason may be found in the announcement released by Qudian on April 14. "In view of the uncertainty of China's online consumer finance market supervision, in order to maintain asset quality, Qudian has implemented strict credit standards for its loan business, the announcement revealed. ”
According to the 2021 financial report, Qudian's net profit last year was 586 million yuan, down 38.89% year-on-year.
At the same time, the announcement also shows that Qudian expects the total amount of loans and related income to be further reduced in the second quarter of 2022. Qudian will continue to assess the state of the online consumer financial market and related regulatory developments. Based on this ongoing assessment, the company may end its credit operations.
Fun Shop, which started with a campus loan, is finally ready to end its credit business. Qudian was listed on October 18, 2017, and on the first day of listing, Qudian recorded a maximum share price of $35.45, an increase of 43.1% from the issue price, and its market value reached $11.34 billion. After encountering strong supervision in 2019, it has not been able to touch the doorway of business transformation, including but not limited to the financial leasing platform "Dabai Automobile" for car buyers, and the early education business "Wanlimu Children's Growth Center". The latest news shows that Qudian will enter the "pre-made dish".
Similar to Qudian, the two apps under the micro-loan network, "micro-loan network" and "micro-easy financing", are also in a state of unusable. After clicking on the "micro-loan network" APP, it will display two options of "I want to lend" and "I want to borrow", after selecting "I want to borrow", the APP prompts you to download the "micro-loan borrowing" APP, but the software store shows that there is no such software. The "micro-integration" of "focusing on elite business" is too high to be used normally.
As a veteran online lending platform, Micro Loan Network was launched in July 2011, and has been the leader of car credit in the domestic online loan industry from 2015 to 2017, and was listed on the New York Stock Exchange in November 2018.
With the consolidation and acceleration of the P2P industry, MicroFinance announced that it will stop providing new loan projects from February 2020. In May 2020, MicroFinance officially announced that it will withdraw from the online lending industry before June 30, 2020 and will no longer operate online loan information intermediary business.
On July 20, 2021, the Shangcheng District Branch of the Hangzhou Municipal Public Security Bureau issued the "Notice on the Disposal of Micro-credit Network (14)". According to the circular, the public security organs have completed the verification of the relevant information and data of the lenders. From July 21, Xinnet Bank will return funds to lenders involved in unpaid principal on the "Micro Loan Network" platform.
Rong360 mainly does diversion business, and Xinye has both technology diversion and self-operated business
Jianpu Technology's consumer finance APP is "Rong360", there is currently no self-operated consumer loan products, mainly based on the information submitted by consumers, recommended loan products, including: easy to borrow quick loan, recruitment order, Tongcheng - money tour, bean money, you and I loan - financial excellent loan, eight precepts of financial services, use of Bai, money to spend, easy to spend, Youhui wallet, Tianmei loan, white cat loan, love money and so on.
According to the 2021 financial report, the revenue of credit card recommendation services of Jianpu Technology increased by 38.4% from 294.6 million yuan in the previous year to 407.8 million yuan (US$64 million); the loan referral service revenue increased by 52.6% from 109.8 million yuan in the previous year to 167.5 million yuan (26.3 million US dollars), mainly due to the increase in the number of loan applications on the platform.
In fiscal 2021, the number of domestic loan applications filed by Jianpu Technology was about 13.6 million, an increase of about 94.3% over fiscal 2020. The average fee per domestic loan application fell from 13.3 yuan in the previous fiscal year to 11.4 yuan ($1.8) in fiscal 2021.
Xinye Technology Lending APP "Paipai Loan Loan" is similar to "Rong360", the loan product name is "Select Loan", the main function is to match other loan platforms for consumers. It is worth noting that when filling in the loan amount, the starting loan amount of Paipai Loan is 10,000 yuan. In addition, on the home page of the lending page, Paipai Loan does not explicitly indicate the annualized interest rate of the loan in accordance with regulatory requirements.
Consumers cannot directly complete the loan on the "Paipai Loan", but must download other APPS to complete the loan under the guidance, for example, the Star Premium recommended by Paipai Loan will eventually need to download the "Hongyue Financial" APP, and Hua Ya preferred to download the corresponding APP directly. In the subsequent attempt, after filling in the application information, the platform showed that "because it is too hot, the application quota is full".
In addition to "Paipai Loan Loan", Xinye Technology also has a consumer loan APP "KOO Wallet", the operation of the APP, the group to which it belongs to Paipai Rongxin, provides cash loans and KOO flower cards. Cash borrowing can be directly withdrawn cash, while the KOO flower card can only be used in consumption scenarios and can be bound to WeChat wallet. After several attempts, the app failed to pass the loan application of the members of the research group. But Xinye Technology said that they still have their own loan business, and it does not just divert other lending institutions. In addition, the app does not specify an annualized interest rate.
Enjoy flowers, installments with a maximum annualized interest rate of more than 24%
Since the app of the above-mentioned 4 U.S.-listed small loan companies does not have the evaluation conditions, the actual products evaluated are small win card loan, 360 IOUs, suitable flowers, and installment music.
In August 2021, consumer financial institutions received guidance from the regulatory window, requiring loan interest rates to be controlled within 24%. However, this review shows that there are still some products with a maximum annualized interest rate higher than 24%.
21 Asset Management Research Institute applied for loans on the above four platforms under the same conditions. In terms of interest rates, small win card loans and 360 IOUs have interest rates between 13% and 16%, with the lowest interest rate of 12 periods and the highest interest rate of 3 periods. The longer the loan, the lower the interest rate, and the loan software also encourages users to choose a longer loan.
According to the loan homepage, the product of the small win card loan is the "lily random loan" of Lanzhou Bank, and the main lenders include Liaoning Zhenxing Bank and Beijing Sunshine Consumer Finance Co., Ltd. The annualized interest rate of 12 periods is 13.472%, and the interest rate of 3 periods of annualized loans is 16.11%.
It is worth noting that the first page of the small win card loan does not specify the annualized interest rate, only shows "1000 yuan to borrow 12 months the daily fee is the lowest 3 mao 7", until the last step of the application does not show the specific repayment amount per period, but only shows the range, until the loan approval the user can know the actual loan interest rate. In addition, Xiaoying Card Loan has set a certain loan amount threshold, the minimum borrowing amount is 2,000 yuan, and the maximum borrowing amount is 200,000 yuan.
The lenders of 360 IOUs are diversified, including Shanghai Rural Commercial Bank, Baixin Bank Fuzhou Small Loan Joint Loan, Instant Consumption, Jincheng Bank, Zhongguancun Bank, Minmetals Trust, Huaneng Trust, etc. From the perspective of annualized interest rates, it is the lowest evaluated in this period: 12 periods of annualized interest rate of 13.44%, 6 periods of annualized interest rate of 14.16%, 3 periods of annualized interest rate of 16.08%.
360 IOUs, like small win card loans, have a situation where the annualized interest rate is not clearly announced. When you are not logged in, the loan homepage will display "1,000 yuan borrowed for 12 months, the daily fee is as low as 1 mao2 (starting from 7.2% of the annualized comprehensive interest rate)", but after logging in, the prompt will disappear, or it will display "1,000 yuan borrowed for 12 months, the daily fee is as low as 300%7".
In contrast, the Interest Rates for Enjoyable Flowers and Installments are priced higher, with the lowest annualized interest rates exceeding 20%.
There are two options for borrowing time, 3 months and 6 months, with an annualized interest rate of 21.46% for 6 months and an annualized interest rate of 24.18% for 3 months, and the lender is not shown.
Yixianghua told the 21st Century Asset Management Research Institute that Yixianghua has been actively responding to the spirit of supervision and continuing to cooperate with cooperative institutions to reduce interest rates. At present, all business departments within Yixianghua are working together with cooperative institutions to fully cooperate with the interest rate reduction work and strive to complete the goal of interest rate pressure reduction as soon as possible.
Installment Music also has two options for borrowing time, 3 months and 6 months, with an annualized interest rate of 21.51% for 6 months and an annualized interest rate of 24.24% for 3 months. And the platform recommends 6 loans, "long account period, less pressure".
The 21st Century Asset Management Research Institute contacted Lexin Company, and the other party said that the regulatory time limit for rectification requirements of interest rates below 24% is the end of June, and is currently gradually falling, and there may be a situation where the interest rate exceeds 24%, and the rectification will be completed before the end of June.
The cooperating lending institutions include: Hangzhou Bank Consumption Gold, Bank of Nanjing, Zhongyuan Consumption Gold, Shanghai Rural Commercial Bank, Bank of Gansu, Bank of Xi'an, Baixin Bank, ZhongAn Insurance, China Resources Bank, Happiness Consumption Gold, Changyin Consumption Gold, Beiyin Consumption Gold, etc.
The road to compliance: increase capital of small loan companies, or invest in banks
In January, Fuzhou 360 Network Microfinance Co., Ltd. (hereinafter referred to as "360 Microfinance"), a subsidiary of 360 Digital, underwent industrial and commercial changes, and the registered capital increased from 1 billion yuan to 5 billion yuan. In September last year, 360 Micro Loan just increased its registered capital from 500 million yuan to 1 billion yuan.
This is related to its future plans to expand its business nationwide. In November 2020, the Central Bank of China and the China Banking and Insurance Regulatory Commission (CBIRC) issued the Interim Measures for the Administration of Online Microfinance Business (Draft for Solicitation of Comments), which requires companies operating microfinance business across provinces to have a registered capital of not less than RMB5 billion and a one-time paid-up monetary capital. Microfinance companies that have not obtained qualifications during the transition period of the Interim Measures will be controlled in the scale of existing loans, and will be reduced and gradually cleared.
Under the background of the accelerated reshuffle of the small loan industry, the financial license of the national exhibition industry is naturally more scarce.
The results of 360's bet on the small loan business are also reflected in its revenue. According to the 2021 annual report, the total net income of 360 Digital in 2021 increased from 13.564 billion yuan in 2020 to 16.6356 billion yuan (US$2.6105 billion), an increase of 22.6%, and the operating income increased from 3.792 billion yuan in 2020 to 6.7862 billion yuan (US$1.0649 billion), an increase of 79.0%.
Net revenue from platform services was RMB6,446.5 million (US$1,011.6 million), compared to RMB2,160.2 million in 2020. Loan facilitation and service charges were $5,677.9 million ($891 million), compared to $182.67 million in 2020. The year-on-year increase was mainly due to the increase in loan facilitation under the capital-light model.
In addition to capital increases, some small loan companies have also promoted standardized development by taking shares in banks. According to the 2021 annual report, the annual net income of Xiaoying Technology was 3.626 billion yuan, an increase of 65% year-on-year; the net profit attributable to shareholders was 825 million yuan. The financial report also disclosed that Xiaoying Technology spent 315 million yuan to invest in Liaoning Revitalization Bank.
Xiaoying Technology's 2021 performance report disclosed that Xiaoying Technology invested 315 million yuan in the fourth quarter of 2021 to acquire 45% of the shares of Shenyang Tianxinhao Technology Co., Ltd., the second largest shareholder of Liaoning Zhenxing Bank, of which the latter held 28% of the equity of Liaoning Zhenxing Bank. This means that Xiaoying Technology indirectly holds a 12.6% stake in Liaoning Zhenxing Bank.
In the announcement of the financial report, Tang Yue, founder, CEO and chairman of Xiaoying Technology, said, "We have invested 315 million yuan in Liaoning Zhenxing Bank (a private bank) and are exploring cooperation with Liaoning Zhenxing Bank to better serve small and medium-sized enterprises." ”
In May 2021, Shenzhen Xiaoying Microfinance Co., Ltd. was approved, and Xiaoying Technology officially obtained a small loan license, becoming the first batch of Internet small loan license companies in the industry to complete the transformation and obtain the national exhibition industry. In the third quarter, Xiaoying officially launched the small loan business, and the balance of loans as of December 31, 2021 was 24.912 billion yuan.
In 2015, Yiren Loan was listed on the New York Stock Exchange in the United States, becoming the first stock of Internet finance to be listed in the United States. Since 2020, CreditEase Microfinance has undergone four capital increases, and the company's registered capital has increased from 200 million yuan to 1.5 billion yuan, although it meets the regulatory requirements that the registered capital of online microfinance companies must not be less than 1 billion yuan, but it still does not meet the threshold of 5 billion yuan for the registered capital of internet small loan companies operating across provinces.
Lexin was established on November 22, 2013 and went public on December 21, 2017. At present, Lexin's share price has continued to fluctuate from the highest price of $13.62 per share on June 25, 2021, and the closing price as of April 29 is 2.63 yuan.
Lexin's consumer finance APP "Installment Music" pioneered the "Internet + Finance + Consumption Scene" business model, deeply cultivating the college student installment market, and once had a market share of more than 60%.
But in recent years, with the continuous tightening of regulations on the use of consumer loans by college students, most licensed companies have excluded college students from target customers, and "installment music" has had to change its main customer base.
According to the 2021 annual report, Lexin's operating income fell by 2.3% from 11.645 billion yuan in 2020 to 11.381 billion yuan in 2021. The decline in operating income was due to lower revenue from credit-oriented services as well as online direct sales and services, partially offset by an increase in revenue from platform-based services this year, the report explained.
In addition, online direct sales fell from 1.901 billion yuan in 2020 to 1.661 billion yuan in 2021, a decrease of 12.6%. This is mainly due to the decrease in the number of e-commerce orders in 2021. Credit service revenue fell from $7.526 billion in 2020 to $6.956 billion in 2021, down 7.6 percent. The change was due to a decrease in secured income, partially offset by an increase in loan facility and service charges- credit-oriented income and interest and financial services income and other income.
With the tightening of supervision, the reduction of demand, and the double-sided attack of licensed consumer institutions and microfinance companies with Internet background, it can be seen that the crazy expansion period of the business of microfinance companies has passed, and has entered the deep water area of standardized development, and strategic restructuring and business fine management have become important problems that they urgently need to solve.
On April 27, the central bank released the statistical report of microfinance companies in the first quarter of 2022. As of the end of March 2022, there were 6,232 microfinance companies nationwide. The balance of loans was 933 billion yuan, down 8.5 billion yuan from the end of last year.
On the demand side of consumption, data released by the National Bureau of Statistics on April 18 showed that in the first quarter, the total retail sales of social consumer goods 108659 billion yuan, an increase of 3.3% year-on-year, and after deducting price factors, the total retail sales of social consumer goods in the first quarter increased by 1.3% year-on-year. Among them, in March, the total retail sales of consumer goods fell by 3.5% year-on-year, the first negative growth since August 2020.
Affected by the epidemic control in the first and second quarters, the demand for consumer credit is weak, which interferes with the sustainability of the business of microfinance companies with consumer loans as the main business, and also affects some small loan license holders - Internet finance companies, how is their business progress and how is the survival of enterprises? 21 Asset Management Research Institute will continue to pay attention.
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