PPF approved to establish Consumer Finance Company in Tianjin as the first foreign investor ever
PPF Group N.V. (herein referred to also as “PPF Group”), the principal holding company of the largest investment group in Central and Eastern Europe, has received approval from the China Banking Regulatory Commission to establish Consumer Finance Company (“CFC”) in Tianjin. Following this regulatory approval PPF Group may establish the first CFC in China to be fully owned by a foreign investor, in accordance with the specific Consumer Finance Legislation adopted in China in August 2009.
The China Banking Regulatory Commission set out “Measures for the Administration of Pilot Consumer Finance Companies” last summer and enabled four trial cities - Beijing, Shanghai, Tianjin and Chengdu - to host new consumer finance companies. The “Measures” are seen as part of the Chinese Government´s push to utilize domestic consumption, in particular the innovative promotion of household spending, as additional driver for economic growth.
The new consumer finance company in Tianjin – named “Home Credit Consumer Finance (China)” - will be solely owned and capitalized by PPF Group with registered capital of RMB 300 million. Once the company has launched it will provide local consumers with the wide range of lending products to finance purchases of durable goods and other consumption needs, including education and travel. As the largest open coastal city in Northern China, Tianjin enjoys a mature, flourishing environment and is believed to be ready for new concepts to drive consumption.
The Home Credit brand has been present in the Chinese market since 2008. During this period “Home Credit China”, the organization headquartered in Shenzhen, Guandong Province and managed by PPF Group, has developed a tailor-made business model based on both operational and funding cooperation with the leading Chinese financial institutions, such as China Development Bank and Fotic Trust. Having successfully calibrated its risk management and operational processes to properly meet the local customers needs, Home Credit China currently serves over 150,000 Chinese borrowers in 1,800 points-of-sale established with some 800 local retailers in Shenzhen, Guangzhou, Chengdu and other places at the South and South-West of mainland China.
The specialized CFC license obtained in Tianjin brings to PPF Group a further operational simplification of back-office and refinancing processes. It should result in enhanced performance and efficiency for Home Credit-branded lending products bringing added-value to cooperating sales-partners as well as to consumers. Having been approved for the CFC license PPF Group is committed to continue investing to grow the Home Credit brand with the objective of establishing a nation-wide presence in China. Leveraging a proven, strong regional expansion capability, arising from the brand´s unique business model, risk control and well organized front-office promotion, Home Credit in mainland China is set to become the strongest footprint of PPF Group´s consumer finance operations in Asia.
Says Du Qiang, Deputy Director, Tianjin Financial Office: “Tianjin Municipal Government welcomes the establishment of PPF Group"s consumer finance company as a good opportunity for Tianjin. It is important for Tianjin to promote households consumption in order to achieve faster and well-balanced social and economic development. Tianjin Municipal Government has started to research consumer finance since 2007 with the full support of CBRC as it believes the consumer finance industry can substantially contribute to the local economy development. The Municipal Government continues optimizing the environment for financial services in order to attract more domestic and foreign institutions to base their operations in Tianjin. Tianjin plays an important role as one of the China´s cities piloting the financial reform concept and opens up a new chapter for its economic development”.
Says Jiri Smejc, Chairman, Executive Committee, PPF Group: "PPF is very proud to have received CBRC approval to establish Consumer Finance Company in Tianjin. As the parent company to Home Credit, we entered China back in 2004 with a strong vision and commitment to serve the local consumers with state-of-the-art lending products based on our best international expertise from operating in emerging markets. Since then we have invested time and resources to learn specific local customer behavior and we are well prepared for the next level of expansion. As the leading international brand in consumer finance, we´re ready to support China Government´s effort to boost domestic consumption which is set to counter-balance the current economy drivers."