When I interviewed David Wei, the chief executive of Alibaba, last year, one of the things he was most keen to talk about was the company’s partnership with Chinese banks to offer loans to small businesses.
It can be hard for private small businesses to get access to capital in China – the banks prefer to lend to big state-owned companies – and Wei was excited by what the initiative might achieve.
In the first half of 2009, SMEs received just 5pc of the total bank loans, and that was when the banks had opened up the taps and were showering the economy with cash.
I later talked to the head of China Construction Bank, Zhang Jianguo, which had partnered with Alibaba on the scheme, and they were slightly more circumspect.
They were keen on the deal, because Alibaba was bringing them new clients who were willing to pay a decent interest rate on their loans, but he didn’t seem to think that the move was the great revolution that Wei had painted it as.
The Ali-loan scheme has loaned out more than 6 billion yuan ($879 million) so far, but Mr Zhang suggested it would continue to be just a tiny fraction of CCB’s overall business. Perhaps sensing this, then, Alibaba has said today it has won its own license to lend money to small businesses.
John Spelich, a spokesman, told Bloomberg the company would say a bit more about the license later in the week. The move makes sense for Alibaba. It has great access to private entrepreneurs and may be less political in who it deems loan-worthy. I’m curious to see how ambitious it is, when the plans emerge.