Wang Tao, Executive General Manager of DING SHENG XIN FINANCE: The Vitality of “Grassroots” Finance is Low-margin but Huge Market



In the past few years, "Inclusive Finance" as a "fresh hot word" merely stayed at the level of the concept until it was proposed in the Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform made by the Third Plenary Session of the 18th Central Committee of the Communist Party of China, "Improving the financial market …… We will develop inclusive finance. We will encourage financial innovations, and enrich the financial market with more levels and more products." Then the big flag of inclusive finance was really raised within the private finance industry. However, DING SHENG XIN FINANCE has been advancing on this road for 10 years.

"DING SHENG XIN FINANCE has been taking inclusive finance as corporate spirit and corporate culture. We hope to serve the general public." When giving an exclusive interview for China Economic Weekly, Wang Tao, Executive General Manager of DING SHENG XIN FINANCE, said "DING SHENG XIN FINANCE is a financial enterprise specially serving grassroots."

Low-margin but big market is a force for DING SHENG XIN FINANCE to make innovations and upgrade itself

Different from most of the finance and guarantee companies in the market, the characteristic of the DING SHENG XIN FINANCE is to break the tradition. It has done a good job in resolving the difficulties of obtaining decoration loans and small and medium enterprise financing by using "credit" guaranteed guarantees without a mortgage. It can provide guarantee for a single loan of RMB 20,000 -- 50 million.

"The biggest characteristic of DING SHENG XIN FINANCE is inclusive finance." According to Wang Tao's introduction to China Economic Weekly, one of the flagship products of DING SHENG XIN FINANCE is its "Home Decoration Guarantee" -- decoration guaranteed loan without a mortgage requirement, which provides decoration funds for those people who have spent all their money for purchasing a house and "cannot afford to decorate their houses" or "cannot well decorate their houses propetry" so that they can realise the beautiful home they dream of. "This market is huge. In China, every year, there are tens of millions of families which face the problem of decoration funds. However, few people are engaged in this business, because the manpower and material resources consumed for such small loans are much greater than those consumed for the general loans. Usually, one transaction of other companies is RMB 50 million. For such an amount, DING SHENG XIN FINANCE may have to serve hundreds of customers. Therefore, many people consider that DING SHENG XINANCE is doing a hard but beneficial job."

Wang Tao believes that DING SHENG XIN FINANCE positions itself as a service provider for the specialized customization of providing financial support and planning for personal, family and career development of ordinary people and that DING SHENG XIN FINANCE promotes such services throughout China. "We believe that the traditional financial system, such as the bank, simply has no time to take care of many businesses. From the perspective of enterprise development, we believe that rooting  for ordinary people is the biggest driving force for sustainable future development. Low-margin but big market is not only the idea we are pursuing but also a force for DING SHENG XIN FINANCE to make innovations and upgrade itself." Wang Tao said to China Economic Weekly.

A financial enterprise should have the mentality of running a longevous enterprise

Faced with some problems arising from the continuous development of private financial institutions the current Chinese market, especially the phenomena of increasingly higher risks, Wang Tao believes that financial industry should abstain from seeking quick success and instant benefits.

"Financial industry is not a place for making quick money but rather an industry of managing risks and operating risks. In this market, it is very easy for a person who has capital to profiteer and then to run off with money. I think that, if we say that the corporate of DING SHENG XIN FINANCE has something different from other companies, it is that you may not make money if your purpose is only for money. "Home Decoration Guarantee", one of the flagship products of DING SHENG XIN FINANCE, was originally not for the sole purpose of making money at first. But up to now DING SHENG XIN FINANCE has shown that is can really make money. It is such a mentality that enables DING SHENG XIN FINANCE to grow stronger." Wang Tang frankly said.

Since its establishment, DING SHENG XIN FINANCE has been adhering to "no deposit-taking and no lending", operating lawfully and guaranteeing professionally. DING SHENG XIN FINANCE believes that only if an enterprise is focussed and dedicated can it be professional.

The unique business mode of DING SHENG XIN FINANCE enables it to have its own distinctive advantage in "risk control". In Wang Tao's opinion, the type of a loan determines the risk of the loan. As to the consumption type loans, due to the Chinese consumption concept, the risks associated with household consumption loans are relatively low. Secondly, in addition to traditional technical means, only when the size of small loans is large enough can the risks be covered by the profits. Finally, the key is the attitude of dealing with the problems, which will finally determine whether an enterprise can grow in great strength and whether an enterprise can control the risk to a minimum.

Besides, for non-performing loans, DING SHENG XIN FINANCE has been adhering to the way of helping the borrowers to resolve their debt problems rather than roughly treating them. Wang Tao believes that desperately recovering the money from customers is not the thing that  financial institution should do at best. As a private enterprise, DING SHENG XIN FINANCE has more flexible mechanisms for those people who are  having temporary difficulties and cannot afford to make loan repayments. DING SHENG XIN FINANCE uses more reasonable solutions to encourage customers to solve their own problems and at the same time to solve the problems of DING SHENG XIN FINANCE."

"DING SHENG XIN FINANCE always adheres to low-margin but big market. For making the same loan of RMB 100 million, it will enable more people to obtain, which at the same time disperses the risks of DING SHENG XIN FINANCE. For the past 9 years, the bad debt rate of DING SHENG XIN FINANCE has been controlled under 0.7‰, which is far lower than those of many financial institutions." Wang Tao said.

Source: China Economic Weekly