What is consumer finance

Traditional consumer finance is a modern approach to financial services that provides consumer loans to consumers from all walks of life. Whether from the perspective of financial product innovation or expanding domestic demand, the pilot of consumer finance is of positive significance.

In China's current macroeconomic situation, the timely introduction of relevant regulatory measures is to adapt to the objective economic situation of the trend and needs. From the point of view of financial product innovation, personal credit business is a traditional bank is difficult to fully benefit the field, the establishment of specialized personal consumption finance system, can better serve the individual residents.

Expanded Information:

Source of Consumer Finance:

It originates from the "Pilot Administrative Measures for Consumer Finance Companies" issued by the China Banking Regulatory Commission (CBRC), which China The CBRC announced on the 13th that it has officially released the Measures for the Administration of Consumer Finance Company Pilot Programs and launched the approval of consumer finance company pilot programs. The CBRC will take the approach of first piloting and then gradually liberalizing such institutions, approving one institution in each of the four places of Beijing, Tianjin, Shanghai and Chengdu for piloting, and then promoting them after success.

The Measures stipulate that the main funders of the consumer finance company shall be domestic and foreign financial institutions and other funders recognized by the CBRC, and shall have total assets of not less than 60 billion yuan at the end of the most recent year, etc.; the minimum registered capital of the consumer finance company shall be RMB 300 million yuan; the scope of business of the consumer finance company in the pilot phase shall only include loans for personal consumer durables and general-purpose personal consumption loans, and shall not involve real estate loans and automobile loans. The business scope of consumer finance companies in the pilot phase includes only personal durable consumer goods loans and general-purpose personal consumption loans, and does not involve real estate loans or auto loans.

In light of international experience, the Measures set regulatory indicators for consumer finance companies, including a capital adequacy ratio of not less than 10%, an adequacy ratio of not less than 100% for the provision for asset losses, and a ratio of interbank borrowing of not more than 100% of the total capital, etc.

The Measures also include a minimum registered capital of RMB 100 million.

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