Lufax is an online P2P lending platform that links individual or business borrowers with investor peers to obtain small loans

Lufax-Logo 500

Country: China
Year: 2011

  • P2P lending marketplace: Lufax helps connect individual borrowers who need small loans to investors who are willing to lend out funds
  • Key figures
    • Registered users as of Feb 2015 = 7 million
    • Transaction volume = RMB 4.1bn over 30 days in January 2016
    • Loans outstanding = RMB 35bn in January 2016
    • Company valuation = $18.5 million, and considering $5bn IPO in HK and Shanghai as early as 2016
  • Investors
    • Bank of China Group Investment Ltd
    • Guotai Junan International Holdings Ltd
    • China Minsheng Banking Corp Ltd
    • BlackPine Private Equity Partners
    • CDH Investments

Concept

  • Lending service
    • C2C: Lending marketplace
      • Business model: Credit is provided by individual investors that invest in loans. Borrowers typically receive this money within days.  Investors receive interest when the loan is repaid.
      • Credit risk: P2P borrowers go through a credit assessment via offline stores as well as an online risk review. Once the credit assessment is cleared, borrowers can obtain credit online
      • Asset providers: Individual investors
      • Fees: Loan fee of around 4% of total loan amount, charged to the borrower
  • Financing service
    • B2C: Corporate finance
      • Business model: Lufax structures and packages assets from corporations for distribution to individual investors
      • Asset providers: Corporations
    • F2C: Online securitization platform
      • Business model: Lufax structures and packages assets from asset providers for distribution to institutional and individual investors
      • Asset providers: Banks, leasing companies
      • Asset categories: Auto loan, credit card loan, consumer loan and SME loan

Consumer Benefits

  • SME market: SMEs can access small loans that they need. In China they are underserved by traditional banks that typically lend to big and more established companies
  • Better rates: Lower cost of operations compared to traditional banks, with savings passed down to borrowers. Investors also earn higher than normal interest rates that vary based on maturity (~7-8%).
  • Quick: Compared to traditional bank loans, borrowers have access to funds quickly
  • Secured: Most of the loans are guaranteed by Ping An, one of China’s largest insurance companies

How to Use