China Commercial Credit, Inc. (NASDAQ: CCCR), a microfinance company whose current major business is providing microcredit loans and loan guarantees to small-to-medium enterprises (SMEs), farmers and individuals in Jiangsu Province, today said it has launched Pride Lending Club, http://www.pridelendingclub.com/, an online loan portal subsidiary pairing prospective borrowers with willing lenders and qualified loan guarantors throughout China.
The portal, China's first to be offered and managed by a microcredit company, is designed to increase the safety of online loans by requiring each loan application to be fully guaranteed by a qualified guarantor -- a microcredit or loan guarantee firm or other financial service entity -- prior to the loan being issued. Pride has to date reached agreement with four such entities to provide these guarantees such that at any one time, guarantees can be provided for loans with an aggregate principal amount of up to $55 million.
As part of the loan process, each of the guarantors will agree to:
(1) Consider providing the necessary loan guarantees for prospective borrowers -- primarily SMEs -- including reviewing the borrower's financial condition, gauging the risk of the requested loan, and, if necessary, requesting sufficient collateral;
(2) Accept Pride's limit on the maximum aggregate value of loans it is allowed to guarantee;
(3) Upon deciding to issue a particular guarantee, refer the prospective borrower to Pride for a comprehensive review of the loan application; and
(4) Agree to reimburse Pride, within five business days, for any repayment Pride makes to the lender should the borrower default on the loan.
Should Pride determine that the loan application entails the minimal level of risk, it will post this application on the portal website and initiate a bidding process among interested lenders to determine which of them is willing to make the loan and under what terms and interest rate. At the end of this process, the lender or lenders offering the best terms will extend the loan to the borrower. Once the loan is made, Pride will conduct post-loan monitoring and ongoing credit risk management.
For services provided, Pride will receive management fees of approximately one to two percent of the loan principal and eight percent of the interest received by lender.
Pride will neither fund nor guarantee any loan on the portal, and will therefore undertake minimal credit risk for any loan transaction.
The portal will be managed by Mr. Yan Cheng, who has nearly 30 years of experience in the financial industry including ten years in a management position with the China Banking Regulatory Commission.
"We are very excited to be launching Pride Lending Club," said China Commercial Credit CEO, Mr. Huichun Qin. "By taking advantage of our existing relationships with many of China's highly qualified financial service entities, we are confident we can rapidly build a loan guarantor base that will total as much as US$85 to 100 million by the end of this year."
The portal should be available on mobile platforms later this year, he said.
About China Commercial Credit
China Commercial Credit (http://www.chinacommercialcredit.com), founded in 2008, provides business loans and loan guarantee services to more than 280 small-to-medium enterprises (SMEs), farmers and individuals in China's Jiangsu Province. Due to recent legislation and banking reform in China, these SMEs, farmers and individuals -- which historically had been excluded from borrowing funds from State-owned and commercial banks -- are now able to borrow money at competitive rates from microfinance lenders. According to 2012 data, SMEs, farmers and individuals account for eight of ten jobs in China and comprise 60 percent of the nation's GDP.
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This press release contains forward-looking statements within the meaning of United States securities laws. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. You should review the factors described in the section entitled "Risk Factors" in our annual report on Form 10-K filed with the SEC on March 31, 2014 and other documents we file from time to time with the SEC. We qualify all of our forward-looking statements by these cautionary statements.
SOURCE: China Commercial Credit, Inc.