OUR RURAL

FINANCE PRACTICE

Number of people that have

a credit record

4:1Urban vs. Rural

Funding shortage

in rural areas

3.05Trillion RMB

Number of people employed

by FIs per 10,000 people

329:1Urban vs. Rural

Availability of formal credit

in rural areas

Note: Data as of Dec 2015

A Snapshot of China’s Rural Finance Environment

29.4%

High Operating

& Risk Costs

Limited Information &

Assets

Credit

Constraints in

Rural Finance

Demand-sideRural Borrowers

Supply-sideRural FIs

Key Issues

Key Pain Points

Rural Finance

ModelHigh Operating

& Risk Costs

Limited Information &

AssetsDemand-sideRural Borrowers

Supply-sideRural FIs

Key Pain Points

Data

Tech

Integrated Solutions

ANT FINANCIAL

• Ant Financial is a technology company that brings inclusive financial services to the world.

• Ant Financial was officially founded in October 2014 and originated from Alipay, founded in 2004.

• Ant Financial is dedicated to bringing the world more equal opportunities by building a technology-

driven open ecosystem and working with other financial institutions to support the future financial

needs of society.

Rural Areas

Agriculture

Farmers

Rural Finance

Ant Insurance

Integrated solutions

Ant Financial & Rural Finance Business

A Roadmap of Ant Financial Rural Finance

Phase 1: 2015-2016

• Rural Taobao: Rural Taobao

partners and their customers

• CFPA Mircofinance: Covering

85% of poverty-stricken counties

and 82% of women in villages

Online lending model

Online + offline lending model

Phase 2: 2016-2018 Phase 3: 2017-2018

• Households breeding cattle, pigs,

or poultry (New model of

Agriculture Households)

• Downstream rural dealers

Supply chain finance model Digitalized platform model

• Mass rural residents in county

level or below

Development phase of Ant Financial rural finance

• Ant Financial uses big data and AI algorithms to provide loans to SMEs and rural farmers called the “310” model: 3

minutes to apply for credit in bringing convenience to people, 1 second to approve based on substantial

background analysis, and 0 people involved in the decision that to make sure the process is fully automated,

• In counties and villages that with limited access to established financial services, we work with offline

acquaintances such as Alibaba Rural Taobao partners and CFPA Microfinance and provide users with various of

financial services including loans. The initiative has introduced across China including some poverty-stricken

counties.

• Rural Taobao: Rural Taobao partners and their customers

• CFPA Microfinance: Covering 85% of poverty-stricken counties

and 82% of women in villages

O n l i n e a n d o f f l i n e l e n d i n g m o d e l

Phase 1: 2015-2016

O n l i n e l e n d i n g m o d e l

Ant Financial rural finance concept

Inclusive

concept

1

Charitable

mentality

2

Commercially-

oriented

principle

3

Power of

ecosystem

5

Technology-

driven

innovation

4

• The supply chain finance model is to lead agricultural material & implements with high quality to rural areas,

and agricultural products with high quality going to urban.

• By connecting the management system of agri-enterprises, we lend to the customers who have long term

business relationship with the big enterprises with non-cash Loan. The borrower can only use such kind of

loan to purchase raw material online. There is no guarantee needed, no insurance involved, and it is also 310

experience.

• Households breeding cattle, pigs, or poultry (New model

of Agriculture Households)

• Downstream rural dealers

Phase 2: 2016-2018

S u p p l y c h a i n f i n a n c e m o d e l

Development phase of Ant Financial rural finance

• Work with financial institutions to build a Joint Loan platform with digital risk management capability that is

designed for residents of county-level and below, so as to extend financial institutions’ footprint to grassroots

and promote the growth of inclusive finance.

• Work with county-level governments to build a platform to provide local public services. The financial services

are embedded in it. With the spreading of platform by local governments, inclusive finance get well known as

well.

• Mass rural residents of county level and below

Phase 3: 2017-2018

D i g i t a l i z e d p l a t f o r m m o d e l

( i n c l u s i v e f i n a n c e i n r u r a l a r e a s )

Development phase of Ant Financial rural finance

Smart transportation

Public Housing

Social insurance

Utilities

Smart

food market

Disaster alertEducation

EntertainmentLocal official

hotline

Visit doctor

Fee payment

Inclusive finance

in rural areas

Ant Financial rural finance-Inclusive finance at county-level

• Xintai County, Shandong

• Qixia County, Shandong

• Zhucheng County,

Shandong

• Zoucheng County,

Shandong

• Cao County, Shandong

• Badong County, Hubei

• Lichuan County, Hubei

• Yuanan County, Hubei

……

• Neixiang County, Henan

• Lankao County, Henan

• Sheqi County, Henan

• Fengqiu County, Henan

• Ningling County, Henan

• Yucheng County, Henan

• Yongcheng County,

Henan

• Anji County, Zhejiang

• Tongwei County, Gansu

• Linyao County, Gansu

Online lending model

Online + offline lending model

Supply chain

finance modelDigitalized

platform model

……

Data

input

Resource

integration

Risk control

and

management

Product

R&D

Financing

Farmers

Agricultural

Industry

Rural finance focuses on farmers and agricultural industries

offering tailor-made financial services to them

THANK YOU