Chinese tech giant Meituan Dianping has received clearance to issue $722 million worth of securities backed by loans to small businesses despite the ongoing crackdown on microlenders in China, Caixin reports.
Meituan says it is ready to issue its first RMB 500 million ($72 million) batch of securities, which are backed by small loans provided by a Meituan financial subsidiary to merchants that use Meituan’s platform. The funds raised through the asset-backed securities (ABS) sale will be used to provide more low-interest loans to merchants, according to the company.
Meituan is not the only tech company in the ABS space. Ant Financial, the financial services affiliate of Alibaba, raised RMB 293 billion through issuing ABS last year.
However, Ant has drastically scaled back its ABS issuance this year after regulators began scrutinizing this practice much more closely than previously.