December 4, 2009 ICBC started its online financing service by the official opening of its "ICBC Online Financing Service Center" ("Center") in Hangzhou, Zhejiang. Industry insiders said that the Center is a move riding the tide of nowadays corporate e-commerce and network trade since services of banking and corporate e-commerce are tightly coupled together in an effective manner. The Center can be viewed as a new and diversified online financing platform for small-and-medium enterprises (SME) in Zhejiang, in the whole country as well.
This new ICBC online financing service uses electronic means which is different in the conventional lending process. Companies who wish to get a loan from ICBC can finish all the steps from application, approval, and drawdown to repayment with just a click of mouse without all the hassles of running to the bank.
The service breaks the barrier of time and space and is especially for small-and-medium to micro enterprises to obtain financing in a short time, in a frequent and quick fashion. The "Easy Finance Link Joint-Guarantee Loan" is a case of online finance where financing is offered to small-and-medium enterprises under joint-guarantee.
This effectively solves the mortgage issue that SME face and enables them to apply revolving loan via Internet Banking. Through this service, loans can be easily applied and repaid as required, very convenient, and drastically lower the financial cost of the company.
Worthy to point out is that ICBC online financing service is not simply a service of putting together internet technology and conventional loan service of a bank. ICBC online financing service is a service driven by what is happening and what will happen in terms of corporate e-commerce and network trade.
The service is targeted to offer a suite of products and services to companies who involve in online business, covering a range of online-based financing services from joint-guarantee loan, credit loan, guarantee loan, mortgage/pledge loan and trade finance. Meanwhile, ICBC offers a full range of integrated financial services to all company clients including loan, trade finance, Electronic Banking, settlement and cash management under a newly formulated company rating system and credit management scheme and newly designed service flows.
As related by the ICBC spokesperson, ICBC's decision of placing its Online Financing Service Center in Zhejiang is a reflection of the importance and concern from ICBC on Zhejiang's network economy since this is a choice based on Zhejiang's goodwill in commercial lending, developed SME groups, hustle and bustle of e-commerce business circles and the leading edge that lCBC Zhejiang Branch held in online financing service there.
The launch of ICBC online financing services in Zhejiang will definitely boost the network economy of Zhejiang or even the whole country, make easier for small-and-medium enterprises to obtain bank loans and promote Zhejiang, being the province of marine port, as the nationwide large logistics transshipment base.
Being a pilot location for online financing service, ICBC Zhejiang Branch, until the end of November this year, has achieved great result with over RMB 1.5 billion of outstanding balances in all online financing services and nearly RMB 5 billion of loans were cumulatively released.
The ICBC spokesperson further expressed that ICBC being a large state-owned bank will continue to fulfill its social responsibility. ICBC strives to help companies to solve the difficult financial situation during e-commerce business and online trades. Further, ICBC will continue innovation in products and systems in line with the customer needs and market requirements.
In the pipeline are more complete and rich product scheme, new products and new services that are designed to better suit the corporate e-commerce and network trade market. ICBC aims to offer diversified, people-centric and customized integrated online financing products and services to all the companies and to raise the level of financial services to small-and-medium enterprises.
Background Information: ICBC Online Financing Product Profile
I. Online Loan Link Corporate Revolving Loan
Today, small enterprises are the cornerstone of China's economy and social development. Loan service to small enterprises is much retail in nature with frequent withdrawals in small amounts and uncertainty of time and place in withdrawal and repayment. Conventional loan products hardly meet all these requirements of small enterprises that usually do not have stable supply channel and sales market. Once there is an opportunity, small companies have to make a decision on the spot, demanding considerations such as technical capacity, risk determination and capital source. Since banks do not offer inter-city loans, companies have to sign letter of intent first and fly to the related city to discuss with the local bank in details. Agreement can be concluded only if source of funding is secured. This means that small enterprises may miss many opportunities at the fickle of the ever-changing market.
In light of the above, ICBC continues meeting the state policy of "support SME" and adopts an assertive plan to offer innovative products to small enterprise by launching the industry-leading online revolving loan product "Online Loan Link".
"Online Loan Link" is a one-time revolving loan contract signed between ICBC and small corporate client. During the validity period of the contract, companies can withdraw or repay loan through Internet Banking. Up to RMB 30 million can be borrowed in one loan. Companies are free to repay loan by the idle funds or draw loan when in need of funding, simple steps as if using a bank card.
When compared to the conventional bank loan, Online Loan Link can immensely lower the financing cost of a company since this is purely a situation that the company can decide when to borrow, when to repay according to its own peak or low season.
Mr. Chen spoke on behalf of his coating company in Jinhua city, Zhejiang that bank loan in former times was always one-time, yet contracts were signed one by one. Loan period was pre-set, may be half a year, but contract could be concluded in just two months. Loan had to be applied again next time if repaid all at this moment.
This was cumbersome. So we decided to leave the loan continue and paid interest to the bank. The problem was solved after using "Online Loan Link". Here was the calculation: in a 1-year working capital loan of RMB 5 million at benchmark interest rate, at least RMB 20,000 of borrowing cost was saved if we can save 30 days in a year in using the loan.
II. Easy Finance Link E-commerce Online Financing Product Series
Online merchants are a group of new commercial bodies as e-commerce moving along. They are a formidable force behind the transformation and rapid development of economy. However, one of the salient issues that these small-and-medium online merchants have to face is the difficulty to seek funding during financial distress. On one hand their small-scale of operations cast a major difference when compared to the traditional lending customers which a bank would favor. On the other hand, their business models are different from that of the typical companies. Conventional banking loan hardly meets what these small-and-medium enterprises want in terms of secure funding.
In light of this, ICBC leverages on its own advantages to launch the industry-leading online financing product specially designed and developed to meet the requirements of small-and-medium online merchants "Easy Finance Link".
ICBC is the first among the peers in the country to launch "Easy Finance Link", the first such product for online merchants starting from Easy Finance Link Credit Loan. Easy Finance Link is actually a platform set up by ICBC to accept loan applications from online merchants. Once an application is received, the ICBC system will automatically compute the credit limit and interest rate.
A loan contact with certificate of indebtedness will be entered online between ICBC and the small enterprise. The whole process is intelligent, automated, very well-suited for online merchants to apply. Meanwhile, Easy Finance Credit Loan, with maximum limit up to RMB 1 million, is exactly a solution that ICBC offers to help solve the problem of small enterprises at the initial stage or during the early growing stage the difficulty of securing a bank loan without guarantee.
ICBC is performing its social responsibility as its own corporate duty of being a large bank.
According to ICBC person-in-charge, a complete product range on ICBC "Easy Finance Link" is taking shape encompassing credit loan, joint-guarantee loan, guarantee loan and mortgage/pledge loan. Small-and-medium online merchants of different levels can easily find the most applicable ICBC loan products in this step-up financing scheme.
The joint-guarantee loan in ICBC Easy Finance Link is a loan especially for online merchants clustered in an area. Three (inclusive) or more online merchants join together to form a joint-guarantee body and get bank loan through incremental credit. Further, joint-guarantee loan is a kind of self-service revolving loan which can be applied and repaid as situation recalls.
This is a solution really catering for small-and-medium online merchants to obtain financing "in a short time, in a frequent and quick fashion". Since its launch in September 1, 3 joint-guarantee bodies coming from Yongkang area in Zhejiang apply for the loan. An industrial and trading company in Yongkang city came to apply once it heard the news on ICBC new joint-guarantee loan.
The company never has any hope of getting the loan but was so surprised when ICBC released the loan on September 9. The owner of this company said: "I was amazed at the high efficiency of ICBC online financing product which enables me to obtain 1 million of loan in just 9 days. In addition, joint-guarantee loan can be applied through self-service online, borrow and repay whenever is needed.
This helps to lower my borrowing cost. Joint-guarantee loan is really a financing product for small-and-medium online merchants!"
