OUR RURAL FINANCE PRACTICE

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1 OUR RURAL FINANCE PRACTICE

2 A Snapshot of China s Rural Finance Environment 4: :1 29.4% Urban vs. Rural Trillion RMB Urban vs. Rural Number of people that have a credit record Funding shortage in rural areas Number of people employed by FIs per 10,000 people Availability of formal credit in rural areas Note: Data as of Dec 2015

3 Key Pain Points Key Issues Demand-side Rural Borrowers Limited Information & Assets Credit Constraints in Rural Finance Supply-side Rural FIs High Operating & Risk Costs

4 Key Pain Points Integrated Solutions Data Demand-side Rural Borrowers Limited Information & Assets Supply-side Rural FIs High Operating & Risk Costs Tech Rural Finance Model

5 ANT FINANCIAL Ant Financial is a technology company that brings inclusive financial services to the world. Ant Financial was officially founded in October 2014 and originated from Alipay, founded in Ant Financial is dedicated to bringing the world more equal opportunities by building a technologydriven open ecosystem and working with other financial institutions to support the future financial needs of society.

6 Ant Financial & Rural Finance Business Rural Areas Rural Finance Agriculture Ant Insurance Integrated solutions Farmers

7 A Roadmap of Ant Financial Rural Finance Phase 1: Phase 2: Phase 3: Rural Taobao: Rural Taobao partners and their customers CFPA Mircofinance: Covering 85% of poverty-stricken counties and 82% of women in villages Online lending model Online + offline lending model Households breeding cattle, pigs, or poultry (New model of Agriculture Households) Downstream rural dealers Supply chain finance model Mass rural residents in county level or below Digitalized platform model

8 Development phase of Ant Financial rural finance Phase 1: Rural Taobao: Rural Taobao partners and their customers CFPA Microfinance: Covering 85% of poverty-stricken counties and 82% of women in villages O n l i n e l e n d i n g m o d e l O n l i n e a n d o f f l i n e l e n d i n g m o d e l Ant Financial uses big data and AI algorithms to provide loans to SMEs and rural farmers called the 310 model: 3 minutes to apply for credit in bringing convenience to people, 1 second to approve based on substantial background analysis, and 0 people involved in the decision that to make sure the process is fully automated, In counties and villages that with limited access to established financial services, we work with offline acquaintances such as Alibaba Rural Taobao partners and CFPA Microfinance and provide users with various of financial services including loans. The initiative has introduced across China including some poverty-stricken counties.

9 Ant Financial rural finance concept 1 Inclusive concept 2 Charitable mentality 5 Power of ecosystem 3 Commerciallyoriented principle 4 Technologydriven innovation

10 Development phase of Ant Financial rural finance Phase 2: Households breeding cattle, pigs, or poultry (New model of Agriculture Households) Downstream rural dealers S u p p l y c h a i n f i n a n c e m o d e l The supply chain finance model is to lead agricultural material & implements with high quality to rural areas, and agricultural products with high quality going to urban. By connecting the management system of agri-enterprises, we lend to the customers who have long term business relationship with the big enterprises with non-cash Loan. The borrower can only use such kind of loan to purchase raw material online. There is no guarantee needed, no insurance involved, and it is also 310 experience.

11 Development phase of Ant Financial rural finance Phase 3: Mass rural residents of county level and below D i g i t a l i z e d p l a t f o r m m o d e l ( i n c l u s i v e f i n a n c e i n r u r a l a r e a s ) Work with financial institutions to build a Joint Loan platform with digital risk management capability that is designed for residents of county-level and below, so as to extend financial institutions footprint to grassroots and promote the growth of inclusive finance. Work with county-level governments to build a platform to provide local public services. The financial services are embedded in it. With the spreading of platform by local governments, inclusive finance get well known as well.

12 Ant Financial rural finance-inclusive finance at county-level Fee payment Visit doctor Public Housing Social insurance Smart transportation Utilities Local official hotline Education Inclusive finance in rural areas Smart food market Entertainment Disaster alert Neixiang County, Henan Lankao County, Henan Sheqi County, Henan Fengqiu County, Henan Ningling County, Henan Yucheng County, Henan Yongcheng County, Henan Anji County, Zhejiang Tongwei County, Gansu Linyao County, Gansu Xintai County, Shandong Qixia County, Shandong Zhucheng County, Shandong Zoucheng County, Shandong Cao County, Shandong Badong County, Hubei Lichuan County, Hubei Yuanan County, Hubei

13 Rural finance focuses on farmers and agricultural industries offering tailor-made financial services to them Online lending model Online + offline lending model Data input Risk control and management Farmers Product R&D Supply chain finance model Resource integration Agricultural Industry Financing Digitalized platform model

14 THANK YOU