Wokai Blog: Alibaba Pioneers E-Commerce Microcredit Company in China: Wokai China Microfinance Blog

The Alibaba group has recently pioneered an e-commerce microcredit company called Zhejiang Alibaba Microcredit Company (ZAMCC) based in Hangzhou, Zhejiang province. This company will provide loans of less than 500,000RMB to small and medium-sized enterprises in Hangzhou that would otherwise be denied loan funding from traditional banks. Alibaba incorporates e-commerce into its form of microcredit as clients must be registered and in good standing on Alibaba.com, Taobao.com or Alipay.com. The loan period ends in 30-days and the loan is automatically repaid when buyers confirm receiving their purchases.

This is a strategic move for Alibaba, one displaying commitment to the progression of microfinance in China- the company admits a lacking infrastructure of true microcredit in rural China in the small amounts that Wokai supports through our Field Partners- but is taking the right steps towards promoting microcredit as a leader in the Chinese online retail and payment platform sectors.

By offering loans to small enterprises that are existing customers, Alibaba is expanding its B2B business through appealing to a wider client base and putting up a stronger barricade to PayPal's attempt at expansion in the China market via small e-commerce businesses.

We have yet to see more corporations in China taking the lead in progressing the microfinance industry, but believe that Alibaba will set a great example for others to follow.