Chinese e-commerce platform Fenqile users can pay for items such as biscuits in monthly installments. (Fenqile)
Having been in the days when loaning a loan for just a house or a car in China was quite anonymous.
- Companies offering microloans can raise an annual interest rate of up to 30 percent
- Millennials use with microloans because it is convenient and easier to approve
- Experts warn against illegal providers who ask for "selfies nudie" as collateral for the loans
With the increase in living costs, an increasing number of thousands of Chinese and growing technology countries now jump on the buy-now-pay-bandwagon at a later date.
Chinese finest horses – including Alibaba's Ant Financial and JD Finance, as well as smaller players like Lexin Fintech – pay money on the trend with some even allowing buyers to pay for a package of biscuits in 36 installments over three years.
Lexin, which operates the Fenqile online shopping platform – which corresponds to Chinese "installment happiness" – allows consumers to buy mobile phones, watch, makeup, and even snacks on credit and repayment & loan in installments.
For example, a box with 475 grams of Oreo biscuits for about 50 yuan ($ 10) can be purchased and paid back in monthly installments of $ 2.07 yuan ($ 0.41) over three years.
Even repayments may sound attractive, but this year, annual interest rates of over 20 per cent of Fenqile users were raised in the September 2018 quarter for privilege – the highest annual average interest rate in China is 36 and can not
And while borrowing money for smaller items such as mobile phones is widely accepted in the West, loans have only recently been made – without mention of violators – in China.
Dorrit Chen, Euromonitor International Consumer Finance analyst in China, told ABC that Chinese veterinary surgeons now have many filters to buy large ticket items such as a new car, all for smaller purchases such as breakfast.
Pragmalian millennia & # 39; choose convenience
Dorrit Chen told ABC that there were many thousands of years – unlike the generation of their parents who refused to lend – now choosing to live through a loan instead of other types of payment options, such as cash, for ease.
"This trend not only happens in metropolitan, but also [being taken up by] young generations of small towns, "he said.
According to Ant Financial's latest research, China now has nearly 170 million people born after 1990, with more than 45 million of them having Check Microloan later.
Thibaud Andre, research manager of the Chinese market research company, Daxue Consulting, said that many thousands of thousands used microloans due to the high cost of living.
He said there was a generational gap between older generations who do not like to buy what they can afford and "more pragmatic" millennials and choose to buy everything they needed at the same time.
For example, millennials could choose to buy all of the electronic components they need immediately – such as computer, speakers and keyboard – not waiting to save for each item and buy one at a time.
Dorritt Chen also attributed the popularity of microloans so that the loans were approved.
He told junior generations to have a minimum wage and a fixed position to apply for a credit card, e-commerce platforms that are generally eligible for a loan using their online shopping data as a credit rating profile.
The Zhima (Sesame) credit scores for the huge Alibaba shopping are used for profiling. (Supplied)
Msgid "Late Check – [loan service] Alibaba Affiliate – as one of the most popular online credit service providers, there is a case in the place, "he said.
"[It] offers a credit of 500 yuan ($ 100) to 50,000 yuan ($ 10,000) based on large data analysis of Alipay account history.
"Buy now pays to make shopping easier and easier [more] convenient, which, in particular, promotes demand for millennial shopping as well as the large number of shortcomings and subprime loans. "
However, he also noted a series of disruptive security risks of applying for a loan with small unlicensed organizations.
Nudie & # 39; identity was used; as collateral for loans
10GB pictures of young Nude Chinese college students were dropped online in 2016. (Weibo: Hulixiaoniangzi)
In 2016, 10 gigabits of naked self-links of 161 young female students who had their ID photos were dropped online by illegal microloan providers who had asked for the pictures as collateral for the loans.
Most victims were female young college students – between 19 and 23 years old – from undeveloped regions and China, according to the November 2016 report issued by the state media output, China Youth Daily.
Victims say to the Daily that they are usually tackled by the fraudulent lenders on Chinese social media platforms such as WeChat or QQ – a copy of ICQ – and that the interest rates and conditions are It's been badly explained to the groups to chat with hundreds of members.
According to the report, college students were usually lending between $ 1,000 and $ 2,000 with interest rates of up to 30 percent, and threatened lenders to drop the naked pictures to their families and friends when they did not repay the loan in time.
The option was given to other young women to work in the sex industry to pay their debt.
Chinese consumers include electronic payments such as WeChat Pay and Alipay. (Reuters: Mark Blinch)
China Central Public Protection Comprehensive Management Commission noted one case where Bing Chen, a resident in China's eastern city China, received a huge picture of a girl, Xue Chen, by text by an illegal lender.
Xue Chen added a number of nude pictures for her to receive a 4,000 yuan ($ 800) loan, which jumped to 100,000 yuan ($ 20,000) in just six months, according to the Commission.
During that period, Xue Chen was emphasized to send her more pictures and videos to her to extend the return date of her resignation.
Despite the Commission's attempts to eliminate what is widely expanded as "naked loans" in December 2016, recent reports in the local media say that the famous practice is holding to take place on some Chinese social media platforms.
However, Ms Chen of Euromonitor said that the situation had improved since the end of 2017 when China's financial managers enforced new rules that excluded organizations and individuals without a license from holding a lending business.
Borrowers were also excluded from encouraging too much lending, the collection of debts of abuse, and the delivery of private information to customers, according to the state-owned Xinhua news agency.