MYbank's 2023 ESG Report: Serving Over 53 Million Small and Micro Enterprises in the Future, Pay More Attention to the "Health" of Small and Micro Enterprises

On May 13, 2024, MYbank released its 2023 Environmental, Social and Governance (ESG) Report (hereinafter referred to as the "ESG Report"). According to the ESG report, as of the end of 2023, MYbank has served more than 53 million small and micro operators, with an average loan balance of about 72,000 yuan, of which about 60% of the single loan interest does not exceed 100 yuan. MYbank provided deferred principal and interest repayment support to customers with short-term difficulties, and reduced loan interest of 240 million yuan for 1,617,300 small and micro customers throughout the year.

Jin Xiaolong, Chairman of MYbank, said that since the ESG strategic framework was first proposed in June 2022, MYbank has focused on the long-term development goals of core sectors such as inclusive finance, rural finance, and green finance, and has released ESG reports for two consecutive years. On the basis of continuous expansion, in the future, inclusive finance will pay more attention to "health", whether the financial services of small and micro enterprises are properly matched, effective and sufficient, whether the risks are controllable, and whether they are green, healthy and sustainable. This is also the direction of MYbank's development.

Deepen digital supply chain financial services

MYbank's main business is to serve small and micro business operators. Through the innovation of technology and models, MYbank has continuously evolved and upgraded its financial service capabilities for small and micro enterprises, continuously increased the provision of small and micro credits, and increased the supply of effective financing. According to the ESG report, in 2023, MYbank issued 1.46 trillion yuan of new on-balance sheet loans, served 12.86 million customers, and remained stable in credit services, and as of the end of 2023, the balance of inclusive small and micro loans on MYbank's balance sheet was 193.253 billion yuan, an increase of 21% from the beginning of the year. The average amount disbursed by households and the average loan balance per household increased by 13% and 53% respectively compared with the beginning of the year.

According to the ESG report, in 2023, MYbank will further promote industrial chain services, provide differentiated financial products and risk control levels around the upstream and downstream nodes of refined services for chain owners, and further build a supply chain industry network based on the original corporate relationship map. By penetrating upstream and downstream data, a unified model of "multi-source collection + scheduling decision + fusion computing" is established. At the same time, it builds a three-dimensional cognitive model of the industry, enterprises and users, builds a data network, and restores the portraits of enterprises, customers and industries more accurately, comprehensively and three-dimensionally, so as to provide financial support for small and micro operators in the industrial chain with more efficient and accurate services. By the end of 2023, more than 1,000 brands have connected to MYbank's Dayan System, jointly increasing the loan availability rate for small and micro operators in the supply chain from 30% to 80%.

At present, the small and micro economy is still in the recovery stage, and needs the support of policies and more institutions. MYbank has been one of the initiators of the "Micro Assistance Program" supported by the All-China Federation of Industry and Commerce for four consecutive years. At present, more than 120 financial institutions have joined the "Micro Assistance Program" to provide rich and diversified financial support for small and micro groups.

Nearly half of the small and micro operators come from counties and rural areas

There are more than 53 million small and micro operators in the customer base served by MYbank, of which nearly half are small and micro operators in counties and rural areas. According to the ESG report, since the launch of MYbank's "Big" satellite remote sensing technology in 2020, it has applied satellite remote sensing technology to the process of rural financial risk identification and assessment, solved the financing bottleneck caused by long cycle, high risk and lack of effective mortgage and guarantee in agricultural production, explored the use of digital technology innovation to help the construction of the rural credit system, and accelerated the digitalization of inclusive finance in rural areas.

By the end of 2023, MYbank's "Big" system has expanded its application scope to identify a variety of crops including rice, corn, wheat, and apples through spectra, and estimate the output and output value based on the planting status and growth trend of the crops, as well as factors such as climate, geographical location, and industry prosperity. This data is used to provide credit support to farmers. At present, the "Big" system has been able to identify 15 categories of agricultural products, and has added the ability to identify "greenhouse crops", thus providing credit support for nearly 1.69 million growers in 31 provinces, municipalities and autonomous regions across the country.

Completed the green rating of 8.39 million small and micro enterprises

In the field of green finance, the green recognition standards and preferential treatment are currently only applicable to large enterprises and large projects, and it is difficult for small and micro enterprises to obtain green financial incentives, which is known as the problem of "green finance is not inclusive and inclusive finance is not green", which is a difficult point in the industry. However, the large number of small and micro enterprises is an indispensable participant in the green and low-carbon transformation of the national economy, and to solve this problem, it is necessary to establish a new standard system in the blank field of small and micro green finance.

In November 2022, MYbank, together with a number of partner institutions, released the first group standard of "Green Evaluation Specifications for Small and Micro Enterprises" in China. The standard uses big data and artificial intelligence technology to provide a "three-step" assessment process for small and micro enterprises, including green certification, green rating, and carbon reduction. For enterprises with excellent green ratings, MYbank provides preferential green loan services.

According to the ESG report, in 2023, MYbank further expanded the coverage of the standard, providing green rating services for 8.39 million small and micro enterprises, an increase of 2.16 million from 2022, and 1.31 million small and micro enterprises have received green finance incentives. Through the "Green Winning Loan" product, MYbank has issued green loans totaling 963 million yuan to 3,465 projects, including sewage treatment, human settlements improvement, beautiful rural construction and land protection. At the same time, through the "Green Procurement Loan" product, MYbank has cooperated with 237 green brand enterprises in the home appliance and photovoltaic industries, providing services for 23,000 small and micro enterprises upstream and downstream of these brands.

In order to enhance the industry recognition and application scope of the standard, MYbank has signed cooperation agreements with 11 financial institutions, including Bank of Shanghai, Bank of Jiangsu, Shanghai Rural Commercial Bank, and Ping An Bank. These cooperative institutions will incorporate the green evaluation information of small and micro enterprises into the joint risk control system, and jointly explore commercial solutions to provide green credit for small and micro enterprises.

Jin Xiaolong said in the ESG report that inclusive small and micro financial services have entered the stage of upgrading from "whether they are good" to "whether they are good or not", and the financial health level of small and micro customers is an important criterion to measure the "good or not" of small and micro financial services. Given that MYbank's main service targets are small and micro enterprises, the financial health of small and micro customers has a decisive impact on MYbank's business risk management and future development potential. Based on this understanding, MYbank has made improving the financial health of small and micro customers an important business goal.