The International Finance Corporation (IFC) has proposed to invest up to $44 million in JD Chongqing Microcredit Company (JD CQ MCC), a dedicated lending company for the agri-loans controlled by China’s JD Finance, it said in a disclosure dated August 15.
“The investment entails a 3-year, up to RMB 300 million (USD 44 million) LCY senior loan to JD CQ MCC…The investment will be secured by the guarantee from its ultimate parent and controller – Beijing JD Financial Technology Holding Co., Ltd. (“JD Finance”),” the IFC disclosure said.
Chongqing City-based JD CQ MCC was established in January 2016 and is wholly owned by JD Finance. As of May 31, 2017, its registered capital was $88 million, its total asset was $170 million, and outstanding loans of $166 million.
Established in 2013, JD Finance has several business sectors including supply-chain finance, agri-finance, consumer finance, payment, crowd-funding, wealth management, among others.
JD.com Inc, China’s second-largest e-commerce firm, in a statement on August 14 announced the spin-off of subsidiary JD Finance giving it greater regulatory freedom. It is now a fully Chinese-owned entity.
The proposed investment will expand financial access to the most underserved agricultural MSMEs, IFC said adding that it will also promote big data based agri-lending: through introducing the advanced internet and mobile based financial services to agricultural MSMEs, and accumulating the necessary data for framers and MSMEs along the supply chain.
It will further serve as a pilot program and catalyst to encourage other FIs and ecommerce companies to explore the feasible service model for China rural market, it added.
JD.com, China’s main rival to Alibaba Group Holding Ltd, reported net loss attributable to shareholders of 496.4 million yuan ($74.43 million) in the second quarter, from 252.3 million yuan in the same period a year earlier.