Overview
Over the past 10 years, China's rapid economic development has resulted in disposable income levels rising considerably. In 2004, the disposable income of urban residents reached Rmb5.1 trillion (US$622 billion). The ratio of consumer debt to disposable income among these urban residents in 2003 was estimated at about 27% in China, significantly lower than in Malaysia (75%), Taiwan (55%), and the USA (over 100%), indicating significant potential for the consumer finance market to grow in China.
Penetrating China's secured high-yield consumer finance market offers the opportunity to cater for the large number of potential customers who are currently under-serviced by banks, or who have needs for short-term loans that are approved faster than can usually be obtained from banks. China is one of the world's fastest growing consumer finance markets. According to the Ministry of Commerce, China's high-yield secured consumer finance sector grew to RMB50 billion (US$6 billion) in 2004, but the industry is still in its infancy, and impressive growth potential is anticipated.
Efficient access to consumer finance will be an important contributor to the growth of the consumption industry in China, and the consumer finance service market is an important part of our growth strategy in China. As a result of macro-economic controls imposed by national policy in China and the resulting tightening of available traditional credit, there has been a burgeoning demand nationwide by middle-class and upwardly mobile consumers, as well as by small and medium enterprises, for short term finance that can be approved rapidly without undue bureaucratic delay, in order to meet quick financing needs. |
