The Chinese province of Guangdong’s government launched a Blockchain based financing platform that will help small enterprises in the region access loan financing quicker from commercial banks. The government led project is supported by Oneconnect, which is a fintech firm backed by one of the largest Chinese insurers, Ping An Insurance. The partnership aims to streamline the process for commercial banks to lend funds to small businesses with more detailed and reliable profiles, which include credit ratings provided by its Blockchain network.
This new venture by the government of Guangdong could be connected to the government initiative unveiled back in July to create a Blockchain financing platform to connect with nearby Hong Kong and Macao to help small businesses get loans easier according to the report. One of the platform’s is, Ant financial which announced plans to test its Blockchain network dubbed; Ant Blockchain Open Alliance to support startups while OneConnect filed a $468 million initial public offering in the U.S in the next month.
The new platform creates credit ratings for small and medium businesses depending on the administrative and financial information available about them. This is done by a Blockchain network of 26 government agencies such as the state administration for industry and commerce.
“Borrowing money from commercial banks for small companies has been slow and expensive,” Xiaojun He, the director of Guangdong Local Financial Regulatory Bureau, said in the report.
With the platform in place, small businesses will now be able to use their intellectual property as well as export-import trading records to apply funds for commercial banks which is impossible under the status quo. Thus far, the platform has collected information from more than 11 million companies as well as 129 financial institutions. It has processed three transactions between local technology startups and commercial banks such as the China construction bank, Industrial commerce bank of china, and Ping An Bank.