We observe the development trend of China's consumer finance industry based on the annual report of retail credit service providers. It is suggested to pay attention to the leading licensed consumer finance companies and loan assistance institutions with scientific and technological advantages and active rectification.
summary
1 China's narrow consumer loan growth has recovered by the end of 2021, the balance of China's narrow consumer loans had increased by 9.5% to 16.6 trillion yuan, of which the growth rate of long-term consumer loans by term (13.5%) short-term (6.6%), other consumer loans by product (10.2%) credit cards (8.9%).
2 joint stock banks saw a rebound in the growth rate of consumer loans, and large state-owned banks / rural commercial banks fell somewhat 2021: the year-on-year growth rate of bank narrow consumer loans (credit card + others): rural commercial banks joint-stock large state-owned banks urban commercial banks. Among them, the growth rate of joint-stock banks rebounded year-on-year, large state-owned banks / rural commercial banks fell, and urban commercial banks remained relatively stable.
3 consumer loan asset quality still faces certain challenges 2021: the quality of bank credit card assets stabilized, other consumer loans were under slight pressure, and the overdue rate of lending aid institutions gradually recovered, but there was still a gap compared with that before the epidemic.
4 loan assistance service rate has decreased under the comprehensive impact of pricing adjustment, the service rates of 360 digital science and technology / lufax / Xinye technology / Lexin loan assistance decreased slightly. At the same time, it was more cautious about the guidance of business volume this year.
5 the growth of new users slowed down and the cost of acquiring customers remained high due to the shrinking customer base, the high proportion of old customers, the expansion of new business and the high cost of information flow, loan assistance institutions generally face certain challenges in acquiring customers.
6 credit investigation management measures have been implemented, and loan assistance institutions are facing mode rectification head loan assistance institutions began to explore cooperation with credit investigation institutions. We believe that the rectification plan may have two directions and three paths. (see the text for details)
7 lending aid institutions actively layout "small and micro" business due to the policy side's preference for improving the financing environment of small and micro enterprises, the head loan assistance institutions have made some progress in developing small and micro businesses and continuously exploring the credit needs of small and micro enterprise owners of new customers and stock users by taking advantage of their risk control advantages in the field of consumer loans.
8 Consumer Finance Co., Ltd. increased its capital frequently, and the participation of banks / Internet companies at the shareholder level continued to increase on the one hand, non licensed institutions have entered the "deep water area" of transformation, or will transfer part of their shares. Some consumer finance companies consolidate their capital strength through capital increase to support further business expansion; On the other hand, some regional banks / Internet companies take shares in consumer finance companies to enhance the flexibility of their future consumer finance business.
9 consumer fund has intensified the performance differentiation among companies, and the strong is always strong sample consumer finance companies achieved profits last year, and the asset / revenue / profit scale of head companies such as Zhaolian / Societe Generale / immediate continued to lead, and roe also increased significantly.
10 supervision focuses on four aspects and two main lines, and continues to standardize the development of the consumer finance industry 2021 saw the intensive introduction of consumer finance policies. We believe that the focus of this round of supervision is mainly on four aspects, which may have a far-reaching impact on the industry at three levels of "volume", "price" and "pattern". (see the text for details) p align = "center" risk
Uncertainty of regulatory environment; Market competition exceeds expectations; Decline in asset quality.
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1 China's narrow consumer loan balance has rebounded
In 2021, the loan balance of China's household sector reached 71.1 trillion yuan (with an increase of 12.5%), and the year-on-year growth rate has continued to decline since 2017, including 16.2 trillion yuan of resident operating loans (with an increase of 19.1%), 38.3 trillion yuan of resident housing mortgage loans (with an increase of 11.3%), and 16.6 trillion yuan of narrow consumer loans (with an increase of 9.5%). In the narrow sense of consumer loans: 1) classified by term, the year-on-year growth rate of long-term consumer loans (+ 13.5%) short-term consumer loans (+ 6.6%); 2) Other consumer loans by product (+ 10.2%) credit card loans (+ 8.9%).
From the perspective of growth rate, residents' business loans / housing mortgage loans have declined, but the growth momentum of narrow consumer loans has rebounded, but it is still lower than the level before the epidemic. We believe that this reflects the recovery of residents' consumer credit demand under the effective control of the epidemic in China and the continuous repair of residents' living and consumption expectations and consumer confidence.
chart 1: the growth rate of China's narrow consumer loan balance rebounded in 2021
Source: central bank, China government website, China International Capital Corporation Limited(601995) Research Department
2 joint-stock banks rebounded in growth and large state-owned banks / rural commercial banks fell somewhat
Based on the operating data of sample commercial banks in 2021, among the bank's narrow consumer loans (credit card + other general consumer loans), the year-on-year growth rate of rural commercial banks (+ 14.2%) joint-stock banks (+ 10.7%) large state-owned banks (+ 10.0%) urban commercial banks (+ 8.9%), of which the growth rate of joint-stock banks has rebounded, large state-owned banks / rural commercial banks have fallen, and the growth rate of urban commercial banks has remained relatively stable, but the scale base is small. In addition, we believe that the growth rate of joint-stock banks has picked up, while the growth rate of urban and rural commercial banks is still far lower than the epidemic level. In part, the restrictions on cross regional exhibition industry have brought some challenges to their business expansion.
chart 2: in 2021, the growth rate of consumption loan scale of joint-stock banks / urban commercial banks rebounded, and the growth rate of large state-owned banks / rural commercial banks decreased
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: bank consumer loans include credit card loans and other general consumer loans
3 commercial banks / head lending institutions still face certain challenges in the quality of consumer loan assets
Based on the data of sample commercial banks that have disclosed their performance in 2021, the non-performing rate of credit cards of listed banks increased from -0.13ppt to 1.83% year-on-year, and the non-performing rate of credit cards of large banks / joint-stock banks / urban commercial banks / rural commercial banks in China increased from -0.17 / -0.08 / + 0.18 / -0.07ppt to 1.56% / 2.15% / 1.56% / 2.21% year-on-year respectively; The non-performing rate of other general consumer loans of listed banks rose from +0.14ppt to 1.57% year-on-year, of which China's large banks / joint-stock banks / urban commercial banks / rural commercial banks rose from -0.09 /+0.40 /+0.52 /+0.88ppt to 1.36% /1.59% /2.36% /2.43% respectively.
Overall, we believe that the asset quality of credit card loans has stabilized, while other general consumer loans have been differentiated. At the same time, we still face some challenges under the repeated epidemic.
In addition, we observed that under the stress test of the epidemic, the risk control level of the head loan assistance institutions has been verified and the overdue rate level has gradually recovered. However, due to the contraction of the supply of consumer loan funds, the overdue rate level of some loan assistance institutions increased at the end of 2021. We believe that the asset quality of loan assistance institutions is generally in a good trend, but there is still a certain gap compared with that before the epidemic.
chart 3: the asset quality of bank credit card loans has stabilized, while other general consumer loans still face certain challenges
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: the average value is the weighted average value calculated based on scale
chart 4: comparison of 90 day overdue rate of head loan assistance institutions
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
Note: the 90 day overdue rate of Lujin holdings is the loan principal amount overdue for 90-179 days as of a certain date, divided by the total balance of loan principal facilitated by the company's platform, and the remaining products, consumer credit products, are not included; The 90 day overdue rate of Xinye technology is as of a certain date: the amount of loan principal overdue for 90-179 days (the sum of on balance sheet and off balance sheet amounts), divided by the total balance of loan principal facilitated by the company's platform (the sum of on balance sheet and off balance sheet amounts); The 90 day overdue rate of ant is as of a certain date: the balance of loan principal overdue for more than 90 days (deducting the written off loans), divided by the total balance of loan principal promoted by the company's platform (deducting the written off loans); The 90 day overdue rate of Lexin is as of a certain date: the loan principal amount overdue for 90-179 days (deducting the expected loans and written off loans exceeding 180 days, divided by the total balance of loan principal facilitated by the company's platform (deducting the loans overdue for more than 180 days and written off loans); The 90 day overdue rate of 360 digital division is as of a certain date: the loan principal amount overdue for 90-179 days (deducting the written off loans and loans issued by the smart credit engine) divided by the total balance of the loan principal promoted by the company's platform (deducting the written off loans and loans issued by the smart credit engine)
4 loan assistance service rates are down, and the lending guidelines of loan assistance institutions are more cautious
we observed that in 2021, the take rate (Revenue: revenue / lending volume; Profit: non general criteria net profit / average loan balance) shared by the head loan assistance institutions showed a downward trend, and the trend was more obvious in the second half of the year, mainly due to: 1) regulatory requirements for banks to strengthen the main responsibility of risk control [1] It is strictly prohibited to outsource the key links of pre loan / in loan / post loan management [2] and the data transmission mechanism under the credit investigation and rectification [3] may face reconstruction. We believe that this may marginal weaken the value proportion created by lending institutions in the consumer credit industrial chain to a certain extent; 2) In the second half of 2021, the average pricing of consumer loan products gradually decreased under the guidance of supervision. It is required that the pricing under the two criteria of new issuance or loan balance should be reduced to less than 24% by the end of June this year.
We believe that, on the one hand, the downward pricing may lead to the contraction of the target customer base of loan assistance institutions, put forward better requirements for their customer screening and risk control ability, and their customer acquisition strategy, risk control model and operation strategy may face certain adjustments. Therefore, we also see that the head loan assistance institutions will take 2022 as the transition year to a certain extent at the end of 2021 Maintain a cautious attitude towards the guidance of business volume (the lending volume of lufax / 360 digital science and technology / Xinye technology / Lexin announcement guidance this year increased by 9% - 12% / 12% - 26% / 27% - 31% / 10% respectively year-on-year); On the other hand, the downward pricing will also have a positive impact on loan assistance institutions. For example, it is expected to help them deepen cooperation with more head banks / consumer finance companies and reduce capital costs. In addition, the downward pricing will also bring the customer base up and reduce their credit costs.
chart 5: Lexin loan income take rate has decreased significantly since 3q21
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: take rate = income related to loan business / loan volume in the current quarter
chart 6: lufax has actively adjusted pricing since 3q20
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: income of lufax take rate = income related to loan business / average balance on loan
chart 7: net profit take rate comparison of head loan assistance platform
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: net profit take rate = non general standard net profit / average balance on loan
chart 8: the pricing adjustment rhythm of lufax / 360 digital branch is relatively fast
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
5 new loan users slow down and the cost of online customer acquisition remains high
Based on its own analysis and the advantages of marketing label screening ability, the loan assistance platform has always been used as an online customer acquisition portal for some banks / consumer finance companies that lack customer acquisition ability, accurately recommending potential loan users to financial institutions, so as to continuously improve their customer acquisition efficiency. From the perspective of the aid agency, its access includes voice channel / headlines / WeChat friends circle and other information flow channels, search engines, application markets, tiktok channels and old customers recommendation, among which the information flow channel is one of the most important ways to get passengers (the proportion of customers is generally greater than 50%). Although tiktok and headlines have begun to launch new strategies such as joint modeling, two stage bid and dynamic crowd pack based on the actual needs of advertisers, consumer credit providers generally face the dilemma of high cost and low quality.
Head loan assistance institutions, such as 360 digital technology / Xinye technology, with strong computing power, have become one of the few advertisers who can cooperate with information flow channels to obtain customers in RTA (real time API) mode. However, we found that the cost of obtaining customers per customer was still relatively high last year. Considering that the gradual downward pricing will lead to the contraction of the customer base and the expansion of the main customer base of small and micro enterprises will also bring more costs, we believe that consumer credit service providers in the short and medium term will face certain challenges in obtaining customers.
chart 9: the growth rate of new users of loan assistance institutions has slowed down
Source: company announcement, China International Capital Corporation Limited(601995) research department; Note: 1) the number of new loan users of 360 digital technology / Xinye technology is the difference between the cumulative number of loan users in two adjacent quarters; 2) Lexin is the number of new active loan users in the quarter disclosed in the company's quarterly report
chart 10: the proportion of regular customers in the current new transaction volume of loan assistance institutions is higher
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 11: increased cost per customer of new borrowers
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 12: the growth of precision marketing revenue of Bairong yunchuang 2h21 slowed down
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 13: the growth rate of monthly active users of Internet loan assistance institutions slowed down
Source: questmobile, China International Capital Corporation Limited(601995) Research Department
6 credit investigation management measures have been officially implemented, and loan assistance institutions are facing mode rectification
The central bank issued the measures for the administration of credit investigation business (hereinafter referred to as the measures) on September 30, 2021, which promotes the healthy and orderly development of the credit investigation market by clarifying the definition of credit information and standardizing the whole business process. The measures have been implemented since January 1, 2022, and the transition period is from the implementation to the end of June 2023.
We believe that under the background of regulatory guidance on the decline of loan interest rates, the measures may further weaken the value of lending institutions in the lending process, resulting in pressure on their monetization rate. The business model of Internet platforms / lending institutions that previously provided credit investigation services will face certain adjustments, and their cooperation mode with credit investigation institutions / financial institutions and data transmission mechanism will also be reconstructed. According to the 4q21 performance meeting of loan aid institutions and the non trading roadshow we have held, the head loan aid institutions (such as lufax / 360 digital division / Xinye technology / Lexin) have said that they have cooperated with personal credit institutions to explore rectification plans, but they are still in the initial stage, and the final cooperation plan may be gradually clear this year.
we believe that loan assistance institutions may have two rectification directions and three paths: 1) fully rely on their various financial licenses to transform into financial service providers. They can maintain their self loan mode and guarantee loan assistance mode by injecting capital into their online small loan companies or financing guarantee companies, Loan assistance institutions with shareholder application qualification can also apply for national financial licenses such as commercial banks / consumer finance companies to carry out self operated or joint loan business; 2) Continue to focus on the pure loan assistance mode or meet the rectification requirements through cooperation with credit investigation institutions, in which the potential cooperation mode can be divided into two rectification paths under the optimistic assumption, credit investigation institutions are mainly responsible for data supervision and protecting consumers' rights and interests, while loan assistance institutions continue to enable the lending process of financial institutions under the condition of ensuring the compliance of data collection / processing / output process, but need to pay a certain proportion of fees or profit to the credit investigation institutions under the pessimistic assumption, with the gradual improvement of the capacity-building of credit investigation institutions, licensed personal credit investigation institutions may become the main collectors and service providers of personal credit data and credit related alternative data. Under this assumption, the loan assistance platform previously focused on the pure loan assistance mode may need to transform the technology service providers to give full play to their technical advantages in analysis and joint modeling, Become an outsourcing technology service provider serving financial institutions and personal credit investigation institutions at the same time; Under this assumption, the loan assistance platform will mainly focus on technical support at the levels of data mining and customer screening, and its own data accumulation or retention of user insight may be relatively limited.
chart 14: three path assumptions for the business model transformation of loan assistance institutions
Source: China International Capital Corporation Limited(601995) Research Department
7 loan assistance institutions actively layout "small and micro business"
In recent years, the relevant departments of the Chinese government have introduced a series of targeted policies from all aspects and levels, including monetary policy, regulatory policy, fiscal and tax incentives and optimizing the business environment, forming a long-term and sustainable financial support mechanism for the development of small and micro enterprises. Due to the preferential policies of government departments and financial regulators on improving the financing environment of small and micro enterprises, we found that head loan assistance institutions such as 360 digital science and technology / Xinye technology / Lexin began to vigorously expand the main loans of small and micro enterprises in 2021 (generally, the average amount of each piece is less than 200000 yuan, and the borrowers are individuals). At present, they have made some progress.
Taking 360 digital technology as an example, the company makes full use of its accumulated risk control advantages in the field of consumer finance to actively explore the credit needs of new users and their existing users, small and micro enterprise owners (at present, about 30% of the existing consumer loan users are small and micro enterprise owners). On the basis of the past C-end single center risk control mode, the company has formed a dual center risk control mode ("enterprise owner" + "enterprise") suitable for small breeze control, Joint financial institutions and partners to implement preferential rates and launch "e-commerce loan", "invoice loan", "tax easy loan" and other products to jointly alleviate the survival problems of small and micro enterprises. By the end of 2021, the proportion of small, medium and micro loans in the loan balance of the company had reached 13%, of which the new credit finance of 4q21 was 9.3 billion yuan (year-on-year + 15%). The company said that it would continue to polish relevant products and access enterprise credit investigation products with cooperative banks in the future, so as to attract more high-quality small and Micro customers and improve the service efficiency of small and Micro customers.
chart 15: all-round and multi-level policies are good for small and micro enterprise finance
Source: central bank, China Banking and Insurance Regulatory Commission, Ministry of finance, State Administration of Taxation, China government website, China International Capital Corporation Limited(601995) Research Department
chart 16: comparison of new credit amount / lending volume of loan assistance institutions for small and micro enterprises
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
8 consumer finance company increased its capital frequently and the participation of banks / Internet companies at the shareholder level continued to increase
By the end of 2021, 30 consumer finance companies had been officially established (15 of them had been established for three years and had the qualification to carry out securitization business), of which 3 (Su yinkaiji, ant Xiaojin and vipshop Fubang) were established in 2021. Under the background of steady industry growth, stricter supervision, strengthened licensed operation, gradual downward pricing under the guidance of supervision and credit investigation data, consumer finance companies, as national licenses, can expand their business across regions. At the same time, compared with online small loan licenses, they have obvious advantages in terms of registered capital and leverage requirements, and their license value is prominent.
We believe that with the gradual clarification of the regulatory framework of consumer finance, on the one hand, non licensed institutions that have previously deeply participated in the issuance of consumer credit may enter the "deep-water area" of transformation. At this stage, non compliant institutions and institutions unable to complete the rectification requirements will sell more market shares to consumer finance companies, and the proportion of consumer companies in the source of consumer loan funds is expected to further increase, We can see that in 2021, including Bank of Hangzhou / Bank of Beijing / Zhaolian / Bank of Jiangsu Kaiji, they all increased their capital to consolidate their own capital strength, so as to expand their business scale in the future, enhance their ability to resist risks and enhance their own brand; On the other hand, due to the fact that the license of consumer finance company is a national financial license, which can break through the regional restrictions and expand the industry nationwide, and has obvious advantages in terms of leverage requirements compared with the online small loan license, we find that regional banks (such as Bank Of Ningbo Co.Ltd(002142) / Bank Of Nanjing Co.Ltd(601009) ) and Internet companies (such as didi) all take shares in the license of consumer finance company to enhance the flexibility of its consumer finance business.
chart 17: sorting out the investment and financing events of consumer finance companies in 2021
Source: China Banking and Insurance Regulatory Commission, company announcement, national enterprise credit information publicity system, China International Capital Corporation Limited(601995) Research Department
chart 18: increasing participation of commercial banks / Internet companies at the shareholder level
Source: China Banking and Insurance Regulatory Commission, company announcement, national enterprise credit information publicity system, China International Capital Corporation Limited(601995) Research Department
chart 19: three consumer finance companies were established in 2021
Source: CBRC, China International Capital Corporation Limited(601995) Research Department
9 consumer fund intensified the performance differentiation among companies, and the strong is always strong
Since the State Council approved the pilot establishment of consumer finance companies in 2009, the industry has developed for more than ten years. Due to the differences in establishment time, resource endowment and operation mode, the differentiation of development among consumer finance companies has intensified, and the trend of constant strength in the head has become more and more obvious.
As of April 15, 2022, the shareholders' annual reports of 21 consumer finance companies have disclosed some of the operating data of their holdings of consumer finance companies in 2021. With the epidemic and the gradual recovery of the economic environment boosting consumer credit demand, the sample consumer finance companies have achieved profits in 2021. The head organization Zhaolian / Societe Generale / immediate maintained a continuous lead in the scale of total assets / revenue / net profit, with its asset scale of more than 50 billion yuan, revenue of more than 8 billion yuan and net profit of more than 1 billion yuan, further widening the gap with other institutions. In addition, in terms of the growth rate of various indicators, consumer finance companies are generally in the period of rapid development, and their roe is also in the rising channel. The roe of the sample consumer finance companies Zhaolian / immediate / Societe Generale / China Post / Harbin Bank has been significantly improved in 2021.
chart 20: among the sample consumer finance companies, only Shanxi Merchants' consumer finance revenue shrank
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 21: the net profit of Zhaolian / Xingye / immediate exceeds 1 billion yuan
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 22: total assets of Zhaolian consumer finance reached 149.7 billion yuan in 2021
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
chart 23: the epidemic situation gradually recovered, and the roe of head consumer gold company continued to improve
Source: announcement of the company, China International Capital Corporation Limited(601995) Research Department
10 supervision focuses on four aspects and continues to standardize the development of the consumer finance industry
In 2021, with the intensive introduction of policies for the consumer finance industry, we believe that the focus of this round of supervision mainly focuses on four aspects: 1) macro leverage and financial systemic risk : restrict the Internet platform, banks and other financial parties in the fields of capital, leverage ratio, joint capital contribution ratio, risk control responsibilities, cross regional operation and so on 2) protection of consumers' rights and interests : prevent violent collection, high borrowing cost, opaque information and other problems 3) compliance operation and prevention of regulatory arbitrage : a series of documents are adopted to gradually fill the previous gaps in various business models such as joint loan, pure loan assistance, big data risk control and credit investigation business boundaries 4) market concentration and fair competition in the industry : specify unfair price behavior, restricted trading and other behaviors.
In conclusion, we believe that relevant regulatory policies may bring "volume" to the industry (the growth rate of industry loan scale will transition from high-speed expansion to steady growth) "Price" (the average interest rate of consumer loan products is down and the profit sharing proportion of loan aid institutions has decreased) and "pattern" (the pattern of credit industry chain is reshaped, the capital side is dominated by commercial banks / consumer finance companies, and the loan aid institutions at the customer end are still expected to achieve an increase in market share). (for details, please refer to CICC's published report "China's consumer finance industry: return to robust growth, regulatory restructuring pattern, model determines valuation" and "Research Guide for consumer finance companies: analysis, screening and valuation")
chart 24: consumer finance related policies and news in 2021
Source: central bank, China Banking and Insurance Regulatory Commission, Supreme People's court, State Council, State Administration of market supervision and administration, China International Capital Corporation Limited(601995) Research Department
risk tips
regulatory environment uncertainty
at present, the regulatory environment of the industry is still uncertain: 1) the people's Bank of China issued the measures for the administration of credit investigation business (hereinafter referred to as the measures) on September 30, 2021. We believe that the measures may further weaken the value of lending institutions in the lending process, resulting in pressure on their monetization rate, Loan assistance institutions need to hold personal credit investigation license to carry out credit investigation business (providing users' credit score, credit rating and other products), or they can meet regulatory requirements through cooperation with credit investigation institutions; In addition, the network security law, data security law and personal information protection law put forward higher requirements for data security and personal privacy protection. We believe that loan assistance institutions may face certain adjustments in data collection / analysis and risk control; 2) The Interim Measures for the administration of Internet loans of commercial banks (Draft for comments) put forward relevant provisions on the total amount control of Internet loans, risk control capacity-building and cross regional operation of commercial banks. The short-term capital end of loan assistance institutions may suffer a slight pain, and the long-term loan volume may also be affected by window guidance; 3) The pricing ceiling of consumer loan products has been gradually lowered under the guidance of supervision, and the pricing space and profitability of lending institutions may face some challenges.
market competition risk
At present, changes in the regulatory environment in the industry may lead to more drastic industry reshuffle and intensified market differentiation. In this context, we believe that the head institutions that meet the regulatory requirements are expected to share the incremental cake after the market reshuffle, but there may also be more fierce competition among loan assistance institutions, or lead to the risk that loan assistance institutions face the slowdown of income growth, loss of users, reduction of user retention rate and so on.
asset quality decline
Some lending aid institutions are actively carrying out the transformation of "asset light" lending mode, but some of their loans are still lent through guarantee lending aid mode, trust and their own small loan companies. For this part of loans, loan assistance institutions need to bear credit risk for the loans issued under the "heavy asset" lending mode. For example, adverse factors such as macroeconomic fluctuations may increase the proportion of bad debts and drag down their profitability. In addition, under the "asset light" lending mode, if the quality of customers recommended by lending aid institutions to financial institutions decreases, it will also affect the profitability and sustainability of their business.
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