People walk past a logo of China's e-commerce giant Alibaba in Hangzhou, capital of east China's Zhejiang Province, March 21, 2016. (Xinhua/Wang Dingchang)
ROME, July 15 (Xinhua) -- Representatives from Ant Financial, the financial affiliate of e-commerce giant Alibaba, have shared their experience of rural finance and poverty-alleviation efforts with the Food and Agriculture Organization (FAO), UN's specialized agency leading international efforts to defeat hunger.
During Investment Days 2017, a knowledge sharing event hosted by FAO Investment Center on Thursday in Rome, Chen Jiayi, head of Rural Finance Business Unit of Ant Financial, told stories about three Chinese farmers on how they got rid of poverty through digital inclusive finance.
Ai Huangxi, a 51-year-old farmer, was one of them who received loans from Ant Financial. He was lift out of poverty after applying for a loan via his mobile phone from Ant Financial Services Group.
He bought a tricycle and makes a living in his hometown by transporting goods instead of being forced to coastal cities to find a job. He now repays his loans via Alipay, a leading mobile payment platform in China.
As in other countries, in China lack of collateral prevents farmers from securing a loan from financial institutions and in turn it's difficult for them to get rid of poverty and become better off. But the developed e-commerce industry, which covers every corner of the country, and fintech giants find a way to break the circle.
Cooperating with the China Foundation for Poverty Alleviation (CFPA) Microfinance, a social enterprise with 3,000 representatives operating in 245 of China's poorest counties, Ant Financial explored an "online + offline" lending model -- leveraging the power of partners' knowledge of loan applicants -- to meet the financial needs of rural people.
In addition to CFPA Microfinance, Ant Financial also works with Rural Taobao to identify risks in lending process.
"We want to bring equal access to finance to farmers," Chen Jiayi told FAO officials and specialists.
According to Chen, Ant Financial also grants loans to farmers through MYbank, an internet bank without physical branch and value chain model. The former model allows farmers to apply for loans in three minutes and without any manual intervention while the latter leverages key agri-enterprises' credit and data (both upstream and downstream) to issue loans to farmers.
Data shows that as of March, Ant Financial has provided more than 160 million rural residents with financial services including payment, wealth management, insurance purchases and loans. A total of 1.757 million rural businesses, self-employed businesses, and farmers benefited from these services.
Carlo Bravi, project coordinator of Investment Center Division under FAO's Technical Cooperation Department, said that Ant Financial's rural finance model is really innovative, given to the fact that e-commerce is not being used to sell agricultural products from small producers.
"It was relevant to our business model which has poverty reduction as the final goal... The presentation was effective in conveying the message that a strong digitalized ecosystem, covering urban but also increasingly in rural areas, can be effective in contributing to rural poverty reduction," he said.
He indicated a "strong interest in establishing collaboration" between Ant Financial and the FAO. This can materialize between Rural Taobao plus Ant Financial on one side and FAO as a whole, but also more specifically with the Investment Center of FAO around targeted investment operation, Bravi said.
Niu Xueming, senior economist with FAO, said Ant Financial brings equal and convenient inclusive finance to rural users and small businesses via its technology and ecosystem, which is a good example for other countries and worth replicating in developing countries.
