MICROCAPITAL BRIEF: CreditEase Inclusive Finance Wholesale Fund of China Loans $800k to First 5 Beneficiaries

CreditEase, a Beijing-based wealth management firm, recently delivered CNY 5 million (USD 800,000) from its Inclusive Finance Wholesale Fund to five undisclosed rural microcredit non-governmental organizations (NGOs) in China. The Inclusive Finance Wholesale Fund distributes financial assistance raised from corporate and individual investors to microcredit NGOs. Since its establishment in 2011, the Inclusive Finance Wholesale Fund has raised CNY 10 million (USD 1.6 million). CreditEase charges interest rates between 10 and 20 percent per annum and a service fee between 1 and 10 percent.

Among the beneficiaries is Xi Xiang Women’s Development Association of the municipality of Hanzhong in the province of Shaanxi. This NGO reportedly charges its clients 11.76 percent per annum with four installments due during the one-year term of each microloan. Data on other funding sources that XXWDA may use to offset its expenses are not available. According to the US-based nonprofit Microfinance Information Exchange (MIX), XXWDA reported total assets of USD 1 million, a gross loan portfolio USD 1 million, 1,400 active borrowers, return on assets (ROA) of 1.58 percent, and return on equity (ROE) of 4.42 percent as of 2011.

By Jennifer Young, Research Associate

About CreditEase
CreditEase, headquartered in Beijing, China, is a lending, consulting and professional services firm. The firm states that it intends to act in accordance with its social responsibility “CREDIT” motto that focuses on credit, risk management, environment, development, inclusive finance and trust. CreditEase offers credit counseling and assessment, credit program development, protocol management, cash management and credit management services. In addition, the firm has made efforts in developing internet-based microcredit investment platforms that allow investors to transfer funds in increments as small as CNY 100 (USD 15) to as large as CNY 60,000 (USD 9,630)  to rural residents via www.CreditEase.cn and www.yinongdai.com. According to the US-based nonprofit Microfinance Information Exchange (MIX), CreditEase reported a gross loan portfolio USD 2.8 million, 2,080 active borrowers, return on assets (ROA) of -70.33 percent, and return on equity (ROE) of -90.67 percent as of 2011.

By Jennifer Young, Research Associate

Sources and Additional Resources

South China Morning Post (SCMP) Story: “Microcredit Schemes Struggling to Aid China’s Rural Poor”
http://www.scmp.com/news/china/article/1101720/microcredit-schemes-struggling-aid-chinas-rural-poor

MicroCapital Story: “MICROCAPITAL BRIEF: China Association of Microfinance (CAM), China International Center for Economic and Technical Exchanges, Peking University, CreditEase Microcredit Investment Launch Inclusive Finance Wholesale Fund,” March 6, 2012.
https://www.microcapital.org/microcapital-brief-china-association-of-microfinance-cam-china-international-center-for-economic-and-technical-exchanges-peking-university-creditease-microcredit-investment-launch-inclusive-fina/

MicroCapital Story: ”MICROCAPITAL BRIEF: Chinese Government Starting Rural Financial Reform Project in Lishui,” May 20, 2012.
https://www.microcapital.org/microcapital-brief-chinese-government-starting-rural-financial-reform-project-in-lishui/

MicroCapital Universe Profile: CreditEase
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CreditEase

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