CreditEase-Enabling Financial Inclusion through FinTech

CreditEase-Enabling Financial Inclusion through FinTech
Case Code: BSTR607
Case Length: 20 Pages
Period: 2007-2019
Pub Date: 2020
Teaching Note: Available
Price: Rs.500
Organization : CreditEase
Industry : FinTech and Financial services
Countries : China
Themes: Financial Services and FinTech, P2P Lending
CreditEase-Enabling Financial Inclusion through FinTech
Abstract Case Intro 1 Case Intro 2 Excerpts


Status of Financial Inclusion in China - Until 2012

In 2005, the United Nations (UN) recognized financial inclusion or inclusive finance as a development concept that denoted access and use of financial services including credit, savings, and insurance. Building inclusive financial sectors improved people's lives, in particular, those of the poor. "A small loan, a savings account or an insurance policy can make a great difference to a low-income family...

CreditEase - Inception

Ning launched China's first peer-to-peer' (P2P) lending company, CreditEase, in 2006. He combined the microcredit concept of Grameen Bank – which had turned the traditional banking practices upside down by eliminating the need for collateral and created a banking system based on accountability, mutual trust, creativity, and participation – and Zopa, a UK-based peer-to-peer lending company, which provided a mode for the bottom of the society to get access to credit. However, the first challenge Ning faced when he introduced the P2P lending firm from the West into China was that the social credit system in China was still in need of development and was not as mature as its Western counterparts...

Growth of CreditEase

In June 2008, the company launched Zhuyedai (Loan to Help Business), which provided basic credit loan products to entrepreneurs and self-employed businessmen. In October the same year, CreditEase received the ‘2008 China Business Plan Competition' Award from the University of Maryland, US. In September 2009, the company's P2P sub-platform ‘YiNongdai' was formally launched. This platform allowed people to select borrowers on their own, which mostly included farmers, and complete the entire lending process online...

Fintech and Financial Inclusions in China: Rising Amid Challenges

During this period, market growth, combined with the amplified attention of the industry and a fairly laissez-faire approach of the regulators, convinced a large number of institutional investors to adopt a bullish outlook toward the industry in China. Also, in 2013, as major banks began to tighten up lending, several companies noticed a business opportunity in P2P lending. This period dubbed as the era of online finance in China, saw a gold rush of internet finance and a P2P lending frenzy, in particular...

CreditEase - Rising through Fintech Innovations

CreditEase launched Yirendai, a FinTech based P2P lending platform in 2012 in China. This was an online platform that automated important aspects of its operations and enabled the company to efficiently match borrowers with investors and execute loan transactions. The company tactically focused on prime borrowers, comprising credit cardholders with a salary income, as members of its group tended to be more creditworthy and more receptive to internet finance solutions...

International Expansion of CreditEase

CreditEase had started pushing for overseas investments ever since 2013. CreditEase Wealth Management established its first office for overseas business in Hong Kong, China. It established the Singapore branch in 2014, the Israel branch in 2015, the New York office in 2016, and the Silicon Valley branch in San Francisco in 2017. In 2018, CreditEase Wealth Management expanded the European market and branches and obtained corresponding licenses in the local markets....

The Impact

Thanks to the continuous efforts it had been making ever since its inception, CreditEase grew into a globally leading FinTech company, promoting the growth of inclusive finance and wealth management in China. In July 2012, Yinongdai won the "Outstanding Public Welfare" award for its poverty alleviation and agricultural welfare project. In the 2017 FinTech 250 list released by CB Insights on June 27, 2017, 14 enterprises in which CreditEase's FinTech Investment Fund and Overseas Private Credit Fund invested made the cut. Ribbit Capital, another venture capital firm invested in by the US dollar-denominated CreditEase...

Challenges and the Road Ahead

With the number of successful Chinese FinTech firms was on the rise, the PBOC and the China Banking Regulatory Commission were becoming concerned about how quickly the FinTech industry had risen. They were also worried about their ability to keep up with the growth. The two policymakers cracked down on cash loan micro-lenders. Ning stated, "We still don't have a well-established credit bureau infrastructure." He added, "We still have a long way to go."...


Exhibit I: Milestones of CreditEase
Exhibit II: China's Fintech Sector
Exhibit III: CreditEase's Awards and Accolades

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