Zhang Yiming's lending business, quietly!

Review the financial business of ByteDance in recent years, and you will find that this is simply a quietly rising "Ant Financial"!

Zhang Yiming is too low-key compared to Jack Ma and ByteDance compared to ants——

There are few press releases on ByteDance's financial business, and Zhang Yiming's statement on the financial business is basically not found, and even the heads of licenses such as Zhongrong Small Loan and United Pay are as transparent as small and transparent.

But keeping a low profile doesn't mean not being strong.

"The news that ByteDance's loan balance has reached 100 billion yuan, and the capital contribution needs to reach 30 billion yuan" After appearing on the hot search, Read Jun asked ByteDance for confirmation, but did not receive a reply before writing.

However, the balance of 100 billion loans is not out of nowhere, and multiple sources have cross-verified this statement, "It was already more than 90 billion in April this year, and now 100 billion is a conservative estimate." A person familiar with the matter said.

Zhang Yiming's lending business was quietly made into a head, too fast.

In 2018, ByteDance launched the consumer credit product "Rest assured", which was mainly to divert traffic for licensed institutions, until March 2020, when ByteDance entered the main Zhongrong Small Loan, and in 2021 completed the capital increase and share change, the nature of the business did not change fundamentally, so it was only more than three years for ByteDance to do the lending business, and during this period, ByteDance also sold a large amount of traffic to countless credit companies, and the balance of hundreds of billions was actually not doing its best.

Keeping a low profile doesn't mean not paying attention.

ByteDance has cut a lot of businesses, but it seems that it has not moved the knife on core financial businesses such as payment and credit, but has continued to focus on the layout of licenses - after having United Payment, it has set its sights on fast money; With a registered capital of 9 billion yuan in Zhongrong Small Loan, it is ready to obtain a higher gold consumption license.

What makes Zhang Yiming so obsessed with the license? Read Jun believes that ByteDance's financial business needs a sense of security.

The transition period of the Interim Measures for the Administration of Online Microfinance Business (Draft for Comments) (hereinafter referred to as the "Interim Measures") will end in November this year, but I do not believe that the implementation of the Interim Measures will affect ByteDance's existing business.

The Interim Measures point out that the balance of funds integrated by a microfinance company operating online microfinance business through non-standardized financing forms such as bank borrowing and shareholder borrowing shall not exceed 1 times its net assets; The balance of funds integrated into the fund through the issuance of bonds, asset securitization products and other standardized debt assets shall not exceed four times of its net assets.

Theoretically, Zhongrong Small Loan can absorb 5 times the net asset financing, that is, 6 times leverage, how much net assets does Zhongrong Small Loan have? For the time being, we use the paid-in 5 billion yuan to conservatively estimate that the internal and external funds that can be used by Zhongrong Small Loan are 30 billion yuan. (In fact, the net worth should be more than 5 billion yuan, after all, there are still profits in these years)

The Interim Measures also point out that: (online microfinance companies) in a single joint loan, the capital contribution ratio of the microfinance company operating online microfinance business shall not be less than 30%.

In other words, the balance of about 100 billion in loans is about to touch the business ceiling of Zhongrong small loans, so it seems that seeking a consumer finance license with higher leverage and greater space has become a reasonable explanation.

However, who stipulates that Zhongrong Small Loan must do joint loan business?

The "Interim Measures" does not mention too many clear restrictions on the loan business, and many people in the industry believe that in the current policy environment, there is no leverage restriction at all, which can be regarded as "0:100".

So why does ByteDance have to take a consumer finance license?

First of all, in terms of income, the credit business with strong risk has higher returns than the loan business with weak risk, which can be seen as one of the reasons why ByteDance actively obtained the gold license.

What is the other reason? Although in theory, ByteDance can expand the scale indefinitely in the form of loans, but what about the practical level?

Back in 2020, after the Bund Summit, the "Interim Measures" was issued, Ant Group's IPO failed, but why did Ant Financial fail its IPO?

Before listing, the micro-loan technology platform with revenue accounting for 40% of Ant Group was composed of four companies, of which the total assets and net assets of two small loan companies were very close, that is, the leverage was very close to 1 times, and according to the description in the prospectus of Ant Group, the essence of the micro-loan technology platform is loan assistance business, in other words, the impact of the "Interim Measures" on it should be limited, but why... Read Jun believes that there are many reasons, and suddenly feels confused, and no longer delves into it.

At the same time, the net assets of Ant's two small loan companies are about 35.8 billion yuan, and under 6 times leverage and 30% capital contribution ratio, the joint loan that can be supported is 716 billion yuan, so even if Ant's "loan business" is to be carried out in the form of joint loan, then rectification can have a very simple path - while reducing and giving profits to partners, while increasing capital to small loan companies. Why not? Read Jun believes that there are many reasons, and suddenly feels confused, and no longer delves into it.

No matter how confusing it is, the answer to the final solution is clear, that is, to take a consumer finance license.

Review the financial business of ByteDance in recent years, and you will find that this is simply a quietly rising "Ant Financial"! There have also been rumors that "from 2019, the vision of the entire Byte Finance is to create a byte-version of Ant Financial".

The detour that the ant has taken, will the byte be stupid enough to go again?

Moreover, 2023 is a big year for supervision, and the transition period for key policies such as the Interim Measures and the Interim Measures for the Administration of Internet Loans for Commercial Banks will end in 2023, when no one knows what new changes will occur in the regulatory environment.

Then getting a consumer finance license becomes a prepared option.

In addition to the license problem, another hidden danger of ByteDance's credit business is post-loan collection, and post-loan collection may also have some negative effects on ByteDance's license.

The Measures for the Administration of the Pilot Project of Consumer Finance Companies (hereinafter referred to as the Administrative Measures) point out that if the borrower fails to repay the principal and interest of the loan as agreed in the contract, the consumer finance company shall adopt a lawful method to collect the loan, and shall not use improper means such as threats, intimidation and harassment.

The Interim Measures also clearly require that it is forbidden to collect loans through violence, intimidation, insult, slander and harassment.

Not only these documents, but basically every regulatory document related to credit business will strictly restrict improper collection.

This year is also the big year for consumer protection in the financial industry - just in June, the State Financial Regulatory Administration (hereinafter referred to as "SAMR"), People's Bank of China and the China Securities Regulatory Commission jointly issued the "Announcement on the Work Arrangement for the Handling of Financial Consumer Feedback Matters", which is the first document since the establishment of the FSRC, which shows the importance attached to consumer protection.

How does ByteDance perform on collection?

As of press time, the total number of complaints about Douyin's monthly payment and assured loan products on black cat complaints has not exceeded 10,000, according to industry practice, under the volume of hundreds of billions of loan balances, this level of complaints is not high.

But what about the way to complain? Many complaints allege that Assured Loan and Douyin monthly payment harass the borrower's relatives and friends, and constantly bombard the borrower's phone, and judging from the screenshots posted by some complaints, the density of Assured Borrowing can indeed be called "bombing".

Is ByteDance aware of this suspected improper collection behavior and will it be restrained?

Read Jun on "Is ByteDance post-loan collection an in-house team, an outsourced team, or a combination of both?" What are the employment constraints for collection workers? "Asked Byte for confirmation, but did not receive a response by press time.

Ultimately, why did Byte approach Gitzo? Of course, it's not just Gitzo, ByteDance just wants a license, naturally the more shares the better, but there are very few targets to choose.

According to the Administrative Measures, the main investor is required to "undertake not to transfer the equity of the consumer finance company held by it within 5 years (unless the banking regulatory authority orders the transfer according to law), and specify it in the articles of association of the proposed company." ”

The target selected by ByteDance kinetic energy is directly less than half.

Most of the remaining consumer gold companies are banking or large factories, although most of them are not large, but there is no need to sell them at all - unless the consumer gold companies do not compete, such as Home Credit, or the shareholder's father does not compete, such as Suning.

The advantage of Home Credit is: it really wants to sell, and it is wholly owned by a single shareholder, and it can be directly clapped, but the disadvantage is that it wants too much, in the past few transaction cases, the gold license is only a valuation of 10~2 billion, and it is reported that the asking price of Home Credit is 2 billion yuan...

Under the market economy, as long as it does not violate laws and regulations, it is free to buy and sell, but in terms of personal emotions, I really don't want Gitzo to cut a wave of domestic enterprises before leaving: the regulator gives you a license, and you have to sell 10 figures when you change hands, and——