Abstract
PPDAI was China’s first online platform for unsecured credit-based P2P lending (peer to peer lending). PPDAI had three unique features that made it different from other Chinese P2P platforms: (1) As an intermediary agency between investors and borrowers, it did not get involved in any fund transactions, nor did it provide any kind of guarantee for investors. Instead, it charged commissions on services such as information matching and tools offering.
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Notes
- 1.
JD.com provided shoppers with credit of up to 15,000 yuan and delayed payment options for up to 30 days or repayment in installments (3–24 months). The delayed payment was interest-free and the interest rate for repayment in installments was 0.5%.
- 2.
A service jointly offered by Tmall and Ant Micro Loan, which calculated the credit line available to each authenticated subscriber based on their personal consumption records and allowed them to “buy on credit” accordingly.
- 3.
This payment option offered a credit limit of 1000–30,000 yuan for users to purchase on Taobao/Tmall.
Shoppers were allowed to repay their loans on an interest-free basis by the 10th of the month following delivery. Ant Micro Loan would offer specific credit line to individual consumers based on their online shopping and payment habits. The credit line would recover automatically once loans due were repaid. With this service, shoppers were allowed to enjoy interest-free loans up to 41 days, excluding the time from order placement to confirmation of receipt. The interest rate for overdue loans was 0.05% calculated on a daily basis.
- 4.
Based on the principles of fair and equal opportunity and business sustainability, the Inclusive Finance program was designed to build up financial systems, improve financial infrastructures and enhance supportive and guiding policies to provide reasonably-priced, proper and effective financial services to farmers, micro and small enterprises, low-income urban households, the disabled, the elderly and other disadvantaged groups.
References
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Acknowledgements
This case was written by Prof. Zhu Xiaoming, case writer Zhu Qiong, research fellow Ni Yingzi, and research assistant Huang Chengyan. The case writing was supported by PPDAI.
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Zhu, X. (2019). Case IV: PPDAI: Navigating the Digital Finance Landscape. In: Emerging Champions in the Digital Economy . Management for Professionals. Springer, Singapore. https://doi.org/10.1007/978-981-13-2628-8_6
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DOI: https://doi.org/10.1007/978-981-13-2628-8_6
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