Favorable net tries to gain a firm foothold in net loan market with "small profits but quick turnover"

Absrtact: Into the favorable network is located in the office of Zhongguancun Finance mansion, a little bit of the rule Founder's work station furnishings, is different from people to the Internet pioneering enterprise eclectic's habitual impression. But not enough to start a year, a single month trading volume of 70 million yuan, into the Peer-to-peer network

Into the favorable network is located in the office of Zhongguancun Financial mansion, a little bit of the rules founder of the work station, it is different from people on the Internet start-up enterprises eclectic accustomed to the impression. However, not enough to start a year, a single month trading volume of 70 million yuan, into the Peer-to-peer network loan industry before three, the advantages of such a rapid development of the network is indeed beyond the industry routine.

As an investment banker, the unusual growth rate is within the planning of a profitable CEO, Liu Yannan-"The beneficial network has entered a high-speed development period in which the business scale grows exponentially." According to the development plan of the favorable network, the cumulative trading volume of the beneficial net will increase from $100 million in early August to 300 million yuan by the end of this year, and by the end of 2014, the figure will be $3 billion, which will be $15 billion by the end of 2015.

More than one Peer-to-peer network loan industry veteran has dismissed the plan as "the soap bubble of the Urchin", and more insiders are sceptical about the determination and ability of the network to achieve its strategic goals. But Liu Yannan is not shy to point out that rapidly in the short term to achieve the expansion of the scale of transactions will be a good network business model to the key to success, so that the growth of business scale is not only the ability, but also "cannot be shaken."

In the view of the CEO of the financial Cross-border Internet, compared to those various kinds of loan items flooded in, the rate of return is priced to a staggering level but the funds match "ambiguous" Peer-to-peer network loan platform, the beneficial network will be to buy the idea of the Web site to engage in Peer-to-peer network lending business, so that investment security has become the main selling points and attract a wide range of Trying to grow in the barbaric net loan market in order to "small profits but quick turnover" firm footing.

"Our online investment side is directly facing investors, under the line of the project end is butt-screened high-quality small loan company, by the small loan company supply project." Liu Yannan explained that this is similar to the operation of group buying site: Online Direct docking consumers, offline rely on the business development team (Business Development, hereinafter called BD) directly looking for cooperation merchants, by the merchants to provide purchase items.

Liu Yan South's business ambitions or more than that. Due to the safety of project investment as the main competitive advantage, the advantageous network designed a unique risk control system, and introduced the world's leading FICO wind control model. With the continuous accumulation of project information of different small loan companies, the favorable network can successfully develop the "local version" of the FICO model. The FICO Wind control model, which accords with China's commercial environment, will completely change the basic business pattern of the small loan industry.

However, although the favorable network for their own platform investment security confidence, but the Peer-to-peer network loan industry has not yet clear regulatory policy and the market is not fully educated the status quo, so that Liu Yannan on the industry's regulatory crisis and public relations crisis, feel a bit worried.

Group-buying Peer-to-peer

The selection of small loan companies as a Peer-to-peer network loan platform of the investment project suppliers, is not a beneficial network entrepreneurial team, and more is Liu Yannan in the well-known Equity investment fund TPG work experience of the "derivative products."

In 2012, TPG was intent on making equity investments in the small loan industry in the mainland, focusing on the lucrative profits of small lenders. The fashion in TPG, Liu Yan South also began to study the small loan company. The findings, however, are a bit disappointing to TPG: constrained by relatively stringent regulation, the investment in small lenders cannot be leveraged and the use of funds is extremely inefficient, so some of the best small lenders are not suitable for the involvement of equity investors, although they are lucrative and risk-dispersed.

"But the small loan industry itself is a blue sea market, how to share the blue sea market, the rich profits and growth potential, which has a lot of business opportunities." "After thinking, Liu Yan South finally determined to start their own businesses, and began to try to small loan Company's business and microfinance combined to finance funds docking microfinance projects, docking platform intermediary charge channel fees." The combination of the path, then selected the dissemination and cost advantages of the obvious network platform, the business structure of the beneficial network is also born.

Talk about the beneficial net target customer groups, the Liu Yan South has a strong sense of bringing. "It's the young people of our age who have financial needs but a relatively limited amount of money available." More accurately defined, is under the age of 35, can be used to finance the amount of people under 50,000 yuan. "Liu Yan South also refers to," our age group, most of the people have no savings, the ability to withstand weak, more willing to accept the capital preservation type of financial products. To meet the low risk and even fixed-income product settings, we can capture a wide range of potential customer groups. ”

Liu's other consideration is that as a direct face to ordinary investors in the financial products sales platform, once its "high risk and high return" product impression in the hearts of customers formed in the future will be difficult to reverse, so need to establish investment from the beginning of the "safe and secure" market image.

It is based on the provision of low risk financial products, the beneficial network finally designed the selection of high-quality small loans companies, and then by these high-quality small loans companies to provide quality projects, by investors in the completion of online purchase, under the line with the small loan company directly contracted, and the triple margin to ensure that the principal in the loan defaults can be fully compensated for the transaction structure.

In this way, similar to the group buying site, responsible for the screening of partners under the BD team, it becomes a beneficial network to achieve strategic intent of the key support. "We are looking for quality small loan companies. Liu Yanbei will also apply its experience in investment banking to the work of the network BD team, to the investment bank conduct due diligence method system, to the small loan company partners screening.

In the Network BD team classification, the country's existing more than 7,000 small loan companies, only three types of small loan companies are beneficial to the network can choose the cooperation, which is a clear background of the large small loan companies, Large private enterprises funded by the relatively strong financial strength of small loans companies and in specific regions with rich business resources or based on a specific industry small loan companies.

To meet the above basic threshold of small loan companies, the network BD team will be interviewed by the company executives, local industry associations, regulatory departments and peers in the way, the small loan company for qualitative analysis. At the same time, the network also through the audit of financial statements and tax industry and commerce information, small credit companies to carry out quantitative qualification audits. At present, with the benefit of the network to cooperate with the small loan company has three, respectively, the state-owned enterprises of Xin ' an venture Capital Co., Ltd., Shenzhen Finance joint Micro-Loan Co., Ltd. and by the Shanghai Certificate Group to set up a large speed loan Small Loan Co., Ltd.

Although the small loan project itself financing Financial Limited, but in order to facilitate further diversification of risk investors, the network further on the investment platform to the small loan company financing Project share, investors can decide according to their own willingness to invest in a single project funds amount. "For example, you have only 4000 dollars to invest in, or you can invest 500 yuan per item in 8 projects to make sure the eggs are not in one basket." "Liu Yannan.

According to Liu Yannan revealed that at present in a single small loan project, the profit margin of the net is about 2% of the project loan amount. Although the level of interest rates has been significantly lower than some of the Peer-to-peer platform for High-yield projects, Liu Yannan still thinks such gross margins are "higher than he can be." "I hope that our gross margin can be reduced, let the small and final borrowers to further expand the size of the business." ”

To enlarge the scale of the transaction is the key to the implementation of the beneficial net profit-margins strategy. However, the challenges facing the beneficial web in this regard are also imminent. At present, the network BD only 4 people, and the cooperation of small loan companies only 3, and once the scale of transactions continue to accelerate expansion, whether it is a small loan company's project supply or BD team staffing, there may be shortages.

"The model of the beneficial network, the operation is still relatively successful." But the problem is that the volume is now small, once the transaction volume up, continue to strictly review the small loan company partners, it is likely that the small loan companies can not provide enough projects, and restrict the development of the website. But if the censorship requirements for small lenders are relaxed, the safety of the investment in the lucrative web can be hit. This is a dilemma. A Peer-to-peer website founder said.

In this regard, Liu Yannan that the beneficial network BD team will be further expanded, "20 to 30 people of the scale, will be able to keep pace with the development of the planning requirements." But he also admits that the scale of the current deal is growing exponentially, with initial estimates that the amount of new projects brought by newly added small loan company partners can only grow progression. "There may be a three-month increase in trading volume, while a new small-loan company partner can bring in a new project amount of only 20 million per month." ”

Wind Control Laboratory

Do not carry out offline business, this is a beneficial net of a basic operating principle, also reflected to a considerable extent the beneficial net and Liu Yannan my competition philosophy. "We don't like to play ball, there is no need to increase the risk of being reorganized." ”

Because it will not carry out offline business, with the small loan company to become a beneficial net investment products exclusive suppliers. Therefore, from the surface of the business structure analysis, in the protection of investment security issues, small loan company's own wind control system should play a major role, and the benefit of the network's own wind control team will only undertake some ancillary work.

But the reality is not so simple. In the small loan company's project wind control defense line, the advantageous net itself also constructs the triple wind control "the defensive measure". "The first is the basic information verification, mainly by telephone, to confirm that the relevant small loan project is real." "It's a fundamental analysis of the industry that the project is looking at, and that's how we differ from the small loan company," said Wang Zhongyang, director of the beneficial network risk. For specific industries, we have a strict choice. ”

The last link of the advantageous net wind control, namely is the scoring system that uses FICO technology, according to the various data of the small loan project, the project that conforms to the fractional interval requirement will become the investment target of the net. It is also in this link, Liu Yanbei trying to cultivate different from Peer-to-peer network loan business of another business opportunity.

The 60-year-old rating agency, FICO, has already accounted for 35% of the world's credit approvals and two-thirds credit card rating markets worldwide. However, due to the lack of historical data of China market, FICO technology is still difficult to adjust and calculate according to domestic actual parameters, and it is difficult to have universal applicability to China's small loan market and even the whole financial environment.

Liu Yan south to see accurate, it is FICO complete "localization" after the upgrade, can give the whole small loan industry impact. "We have accumulated data on all the current trading cases. Then integration into the FICO scoring system to make it more accurate judgment on the domestic small loan project. ”

Executives at a medium-sized state-owned small-loan company responded by saying once FICO technology is really able to adapt to the domestic business environment after the transformation, "is bound to greatly enhance the small loan company's investment Project review efficiency, and save the cost of human resources, is equal to let the small loan industry from the hand workshop step into the fully automatic chemical plant." ”

At that time, the core intellectual property rights of local edition FICO will become one of the unique competitive advantages of the advantageous network. Obviously, in the highly standardized industry of finance, the innovation of the business model often has the very strong reproduction, the advantageous net can hold the "exclusive Good card" for a long time not many.

"The Lujiazui international financial assets Exchange, which is owned by Ping An group, is in fact similar to the basic model of a favorable network." "A Peer-to-peer network loan platform executive believes that the Ping an group of resources more abundant, this can also provide a great help to Lu Jin's cross-selling." "If there are other big organizations that replicate this model, then the beneficial nets are likely to be mired in homogenization," he said. After all, it's hard to say that small lenders have exclusive exclusivity with the benefit net. ”

Liu Yannan replied: "Lu Jin's advantage is backed by peace, but the baggage is also in this." "Because all the small loans on the platform are safe their own small loan company to provide, other small loan companies for the purpose of confidentiality of their own client resources," it is difficult to actively participate in the Lu Jin transactions, which will greatly restrict the development of Lu Jin speed. ”

Of course, the advantage of the network self-confidence to circumvent the homogenization of the more important reasons for competition, perhaps also lies in the initiative to Baidu search investment in the number of investments is still relatively limited. The market for microfinance investment through the Internet needs to be nurtured. And wait until the market mature, the favorable network has already passed the first advantage, establish its own competitive barriers. Liu Yan South as the planning way.