China's leading home appliance retailer Suning Appliance Co announced Thursday it will set up a microfinance company in a bid to speed up the expansion of its open sales platform.
The microfinance firm will have a registered capital of 300 million yuan ($48.2 million), and the new subsidiary will handle loans, discounted bills and asset transfers for sellers on Suning's online platform, Suning said in a filing to the Shenzhen Stock Exchange Thursday.
Suning made the move just days after B2C firm 360buy.com launched a supply chain financing firm by cooperating with several domestic banks.
360buy.com has financed $1.5 billion and raised more than 5 billion yuan in credit from banks to provide accounts receivable financing and purchase order financing, the company told the Global Times in an earlier interview.
The company launched its open platform at the end of 2010 and now has more than 10,000 sellers.
Small and medium-sized enterprises (SMEs) are currently confronted with capital shortages and it is hard for them to get loans from banks, so offering loans is a good way for Suning and 360buy.com to win over sellers, Lu Zhenwang, founder of Internet consulting firm Shanghai Wanqing Commerce Consulting Co, told the Global Times Thursday.
Suning's move shows that, like 360buy.com, it has devoted significant resources to its open platform, Lu said.
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