The Research On Internet Small Loan Companies Financing Through Assets Securitization

In order to solve the financing difficulties of small and micro enterprises, The Central Bank began to implement small loan company pilot work in 2005. Until August 2008, The Central Bank and the China Banking Regulatory Commission jointly issued the Guidance on small loan company pilot that allow private capital to set up small loan company. In 2011, Alibaba Group set up small loan company in Zhejiang and Chongqing, formally established China's first Internet small loan company, through online business model, provide credit loans to help small and micro enterprises solve the financing problem.However, due to the Guidance stipulate that small loan companies cannot absorb public deposits, the loan from the banking financial institution shall not exceed 50% of its net capital, and therefore, small loan company would face inadequate funds and other problems. In order to support more small and micro enterprises, small loan companies must increase its funding sources. In the current financial environment, small loan companies through asset securitization approach to financing is a viable option.Asset securitization appeared in the United States firstly, it was a very important financial innovations, including "mortgage backed securities" and "Asset-Backed Securitization". Ant micro loan has good risk control system, the credit rating of its loan is very high because it's complete asset management system. Based on these high-quality loans, Ant micro loan successfully launched its Asset-backed securities, it has important meaning for small loan companies that has an important reference through asset securitization expanding financing channels. This paper describes the asset securitization theory and the advantage of Internet small loan companies. The ABS issued by Ant micro loan will be analyzed in detail, and the relevant rules and operating procedures will be interpret in the paper, hoping that can provide corresponding reference to other companies who financing through asset securitization.