MICROCAPITAL BRIEF: China’s Alibaba Launches Microfinance Arm, Ant Financial, to Consolidate Financial Services Units Including Alipay Mobile Payments, Yu’e Bao Money Market Fund

Alibaba Group Holding Limited, a Chinese internet and e-commerce company, recently launched Ant Financial Services Group, a microfinance arm to consolidate all six of Alibaba’s affiliated entities Alipay, an online payment tool; Alipay Wallet, a mobile payment application; Yu’e Bao, a USD 93 billion money market fund; Zhao Cai Bao, a platform that allows individuals and small businesses directly borrow from investors; Ant Micro, a microfinance provider and MY Bank, an affiliated private bank.

Peng Lei, the Chief Executive Officer of Ant Financial, reportedly commented that the company primarily plans to target small businesses and banks. Peng Lei has also reportedly stated that Ant Financial does not have any current plans to hold an initial public offering.

During the quarter ending in September 2013, Alibaba reported an operating profit of USD 786 million on revenue of USD 1.78 billion. The company raised USD 21.8 billion in its Initial Public Offering in September 2014. As of 2013, Alipay had approximately 300 million users, including 190 million active users of Alipay Wallet.

By Ananya Tiwari, Research Associate

About Alibaba Group:

Founded in 1999 in China, Alibaba Group is a family of e-commerce businesses that include consumer e-commerce, online payment platforms, business-to-business marketplaces, mobile applications and internet television. US internet company Yahoo owns 24 percent of the group. In June 2013, Alibaba launched Yu’e Bao, an online savings and investment product. As of December 2013, Yu’e Bao reported deposits of USD 30.4 billion and 43 million clients. As of 2013 Alipay, the online payment arm of Alibaba, had approximately 300 million users, including 190 million active users of Alipay Wallet. During the quarter ending in September 2013, Alibaba reported an operating profit of USD 786 million on revenue of USD 1.78 billion. The company raised USD 21.8 billion

Sources and Additional Resources

[1] EJ Insight, http://www.ejinsight.com/ 20141017-alibaba-sets-up- micro-finance-arm/

[2] Reuters, http://www.reuters.com/ article/2014/10/16/us-china- alibaba-idUSKCN0I50KJ20141016

MicroCapital, February 5, 2014, “Chinese Internet Companies Alibaba, Baidu Offer Financial Services Through Subsidiaries Yu’e Bao, Baifa” https://www.microcapital.org/ microcapital-brief-chinese- internet-companies-alibaba- baidu-offer-financial- services-through-subsidiaries- yue-bao-baifa/

MicroCapital, February 4, 2013, “E-Commerce Companies 360 buy, Suning Appliance to Offer Consumption Loans in China to Compete with Alibaba” https://www.microcapital.org/ microcapital-brief-e-commerce- companies-360buy-suning- appliance-to-offer- consumption-loans-in-china-to- compete-with-alibaba/

MicroCapital, September 28, 2009, “Grameen Trust of Bangladesh Partners with Alibaba Group to Create Grameen China, With Initial Focus on Bringing Microfinance to Sichuan Province”, https://www.microcapital.org/ microcapitalorg-story-grameen- trust-of-bangladesh-partners- with-alibaba-group-to-create- grameen-china-with-initial- focus-on-bringing- microfinance-to-sichuan- province/

MicroCapital Universe Profile, Alibaba Group, http://www.microcapital. org/microfinanceuniverse/tiki- index.php?page=Alibaba+Group

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/ products-page/

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