China Rapid Finance Views Long Term Impact of New Industry Rectification Notice as Favorable to Its Business
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SHANGHAI, Dec. 4, 2017 /PRNewswire/ -- China Rapid Finance Limited ("China Rapid Finance" or the "Company") (NYSE: XRF), a leading online consumer lending marketplace, today announced that it believes the long term impact of the principles outlined in the Notice on the Rectification of Cash Loan Business (the "Rectification Notice") issued on December 1, 2017 will be favorable to its business, as the practices on its marketplace are consistent with the principles outlined in the Rectification Notice.
"The Rectification Notice recognizes the role that the cash loan business has played in serving the consumption needs of a segment of China's population," said Dr. Zane Wang, Chairman and CEO of China Rapid Finance. "At the same time, regulators identified some irresponsible lending activities, such as over-extended credit, borrowing across multiple platforms, aggressive collection activities, extremely high charge rates, and privacy breach. From our inception, we have not permitted these practices on our platform."
China Rapid Finance charges comparatively low rates, close to or lower than the overall fee rate of cash advances charged by credit card companies. Company policy prohibits customers from borrowing new loans until their prior loans have been fully repaid without delinquency and forbids any overly aggressive collection behaviors. To date, no borrowers on the Company's platform have received loan extensions and all have repaid past loans in full prior to receiving new loans. The Company has also made significant investments in infrastructure for information security to protect borrower privacy.
The local regulators are assigned to implement the requirements of the Rectification Notice. China Rapid Finance's management team is working closely with regulators and will make any adjustments, if necessary, to ensure full regulatory compliance.
As the industry consolidates and matures, the Company believes that its 16 years' on-the-ground experience in credit risk management and behavioral data analytics will increasingly differentiate it as a leading marketplace.
"The Rectification Notice is a major step toward creating a rational and sustainable market," said Dr. Wang. "We believe the principles contained in the Rectification Notice will prove beneficial to our responsible approach to the market."
About China Rapid Finance
China Rapid Finance operates one of China's largest consumer lending marketplaces in terms of total number of loans, having facilitated over 27 million loans to over 3.7 million unique borrowers as of September 30, 2017 at a significantly lower borrowing cost than many competitors. The Company deploys machine learning and proprietary decisioning technology to facilitate affordable digital credit for one of the world's largest untapped consumer credit markets: China's 500 million Emerging Middle-class Mobile Active consumers (EMMAs). China Rapid Finance operates a pure play marketplace, and does not take credit risk. The Company utilizes its technology to efficiently select quality EMMAs for its platform. China Rapid Finance facilitates smaller, shorter-term initial loans to these EMMAs and then enables larger, longer-term loans for repeat borrowers who demonstrate positive credit behavior. This "low and grow" strategy enables the Company to attract and retain high quality EMMAs who generate significant lifetime customer value. China Rapid Finance was founded by Dr. Zane Wang, who has decades of consumer credit experience in both the U.S. and China, and is governed by a global board of directors. For more information, please visit http://ChinaRapidFinance.InvestorRoom.com.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "may," "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations from management in this announcement, China Rapid Finance's financial outlook as well as China Rapid Finance's strategic and operational plans contain forward-looking statements. China Rapid Finance may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about China Rapid Finance's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: unexpected difficulties in China Rapid Finance's pursuit of its goals and strategies; the unexpected developments, including slow growth, in the consumer lending market; reduced demand for, and market acceptance of, China Rapid Finance's products and services; difficulties keeping and strengthening relationships with borrowers or investors; difficulties of expanding data and channel partnerships; potentially costly servicing activities; competition in the consumer lending market; changes in PRC laws, regulations and governmental policies; and general economic and business conditions in the regions where China Rapid Finance provides products and services. Further information regarding these and other risks is included in China Rapid Finance's reports filed with, or furnished to, the U.S. Securities and Exchange Commission. All information provided in this announcement is as of the date of this announcement, and China Rapid Finance undertakes no duty to update such information except as required under applicable law.
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SOURCE China Rapid Finance
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