HSBC Announces Trade Finance Loan Partnership
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The bank will leverage big data to offer quick trade financing approvals to Hong Kong merchants on Alibaba’s e-commerce platform Tmall.
HSBC is will use third-party data to approve trade finance loans under a partnership with Alibaba Group’s smart logistics platform Cainiao Network Technology, the bank announced in a statement on Thursday.
The service is available to merchants using Alibaba’s e-commerce platform Tmall, which currently number some 1,800. It is also hoped that the simplified financing process will help retail and assisting businesses resume normal operations amid the Covid-19 outbreak, the partners said.
As part of the scheme, merchants will not be required to provide collateral or financial documents and can get approvals for loans of up to $500,000 within seven days. The bank is also offering a discount of 1 percent off the annual interest rate until the end of June.
By using real-time logistics information for credit assessment, the bank hopes to make loans more accessible and better match the needs of new economy enterprises. The bank said it will explore expanding this service to other e-commerce platforms.
There is a clear need to match the rapid evolution of the market with new solutions, and we believe the new scheme will provide adequate support to online merchants, said Jeanny Ip, head of global trade and receivables finance, Hong Kong and Macau, HSBC.
Questions & Answers
Q.Which specific businesses are eligible for this new trade finance service?
Which specific businesses are eligible for this new trade finance service?
The service is available to Hong Kong merchants using Alibaba's e-commerce platform Tmall. Currently, around 1,800 merchants are using this platform and can access the simplified financing process.
Q.What is the maximum loan amount available and how quickly can approvals be received?
What is the maximum loan amount available and how quickly can approvals be received?
Merchants can get approvals for loans of up to $500,000. These approvals are expected to be processed and issued within seven days of application.
Q.What benefits are being offered to merchants who use this new financing scheme?
What benefits are being offered to merchants who use this new financing scheme?
Merchants will not need to provide collateral or financial documents. Also, HSBC is offering a 1 percent discount off the annual interest rate until the end of June.