WeBank, a consortium led by internet group Tencent, has launched a trial for an online-only bank — a model that will likely be mostly a mobile experience.
The new bank will have no physical branches and will offer loans of less than CNY1 million ($160,000) to small and medium-sized enterprises. The typical borrowing level might be the symbolic first loan to a truck driver for $5,600.
The government is eager to see more borrowing among SMEs, which struggle to obtain loans from the country’s dominant state-owned banks.
Right now, the proto bank barely exists. Interested users find a placeholder site with a QR code. Scanning the code leads the user to some general information about WeBank. As TechinAsia pointed out, this promotional approach indicates WeBank will primarily be a mobile experience.
WeBank’s name borrows from Tencent’s popular messaging service, which is called WeChat.
Tencent is the leading shareholder with a 30 per cent stake. Two investment firms, Baiyeyuan Investment and Liye Group, also own 20 per cent in the bank. The remaining 30 per cent is split among seven other shareholders. WeBank was initially capitalised with $482 million.
As well as Tencent, Chinese internet giants Alibaba and Baidu each received online private banking licences issued in October 2014 and are expected to follow WeBank’s launch.
Three additional online private banks will be backed by electrical component producer Chint Group, Shanghai-based conglomerate JuneYao Group, and electronics retailer Suning Commerce Group.
Alibaba and Tencent already offer mobile payment services which involve users storing funds in online accounts, an experience that will likely give them useful background knowledge for their banking services.