The Guangdong government launched a blockchain-based financing platform on Thursday, which will assist small companies within the region to secure loans faster from commercial banks.
According to a media report from Sina Finance, the government-led project is backed by Alibaba’s fintech arm ‘Ant Financial‘ and ‘OneConnect,’ a subsidiary of one of the most famous Chinese insurers, Ping An Insurance.
The platform strives to streamline the means for commercial banks to grant funds to small enterprises with more reliable and precise profiles, involving credit ratings, conferred by its blockchain network.
The new platform could be the outcome of a government drive started in July to build a blockchain financing platform to unite with nearby Hong Kong and Macao to assist small businesses to get loans more accessible, according to the report.
Ant Financial declared in November that it plans to examine its blockchain network, ‘Ant Blockchain Open Alliance,’ to encourage startups, and ‘OneConnect’ filed a $468 million IPO in the U.S. in the same month.
The new platform builds credit ratings for small and medium enterprises based on their regulatory and financial information through a blockchain network of 26 government agencies like 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, small businesses will be capable of using their intellectual property and export-import trading records to implement for funds from commercial banks, which is difficult under the status quo, according to the report. It can also balance companies with 319 financial products depending on their financial situations.
The platform has gathered data from more than 11 million companies as well as 129 financial institutions, according to the report. It has processed three transactions within local technology startups and commercial banks, including the China Construction Bank, Industrial Commerce Bank of China, and Ping An Bank.
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