Case Analysis On Asset-backed Securities Of Alibaba Small Loan Company

Asset securitization,under the context of China’s economic transition,serves as a critical tool to improve the efficiency of asset allocation.It is the most important and fast growing financial innovation in financial industry over the past 30 years,and also an effective choice in terms of realizing transformational development within financial and non-financial institutions.As the market conditions continue to mature,and the policy conditions of the government continue to improve,asset securitization in China will become the trend of the times and maintain high-speed development.It has always been difficult financing for individuals and tiny enterprises.They could hardly get enough loans to meet their requirements for development from big financial institutions like banks.This seemed to become the crucial factor that limited their development.In order to expand the scale of business and satisfy the financing requests from individuals and small enterprises better,small loan companies were trying hard to develop new off-balance-sheet financing methods.Therefore,small loan asset securitization arose as the times required.Alibaba special asset management plan is the first asset backed security product of small loans in China.The successful offering of the security has relieved Alibaba’s financing pressure on some level,thus indirectly supporting individuals and tiny enterprises financially,has made a milestone in China’s history of asset backed security,and has become a role model for ABS of small loan companies.This article,through detailed analysis of innovations in this special plan in aspects such as operational mechanism,trading structure,credit enhancement,and risk management,summarized inspirations for small loan companies and the development of China’s asset securitization market.