Debt Investment Business
Our Group invests in Debt Investments comprising fixed interest debt instruments through intermediary financial institutions for specific borrowings arranged by such intermediaries. A small part of our business also comprises the provision of microfinancing loans in the Jiangsu Province, in the PRC and focuses on serving the business financing needs of SMEs, microenterprises, and individual proprietors. We operate through our headquarters located in Jiangsu Province. From the commencement of our operations in 2010, we were authorized to engage in micro and small loan business in the Jiangsu Province, where our headquarters are located.
Through our comprehensive due diligence and application review and approval process, comprising the conduct of legal due diligence, project due diligence, and basic background review on borrowers, we offer flexible, accessible, and efficient micro and small loan services aiming to best match our customers’ interim business financing needs, as well as approve projects and fund disbursements in relation to Debt Investments.
Our Group has a defined credit monitoring system to mitigate credit risk, including a reporting system within its risk management department to the CIO, regular reviews conducted by the Investment Committee, and adjustment of investment profiles to reduce exposure in the high non-performing ratio sector or industry. The CIO will also report to the Audit and Risk Committee on the key ratios periodically, and the Audit and Risk Committee will conduct independent risk assessments to ensure that our Group’s financial performance and position are not compromised. In addition, the Debt Investments (at amortized cost) team will also assist in the proactive management, as well as follow-up of past payments and recovery efforts for non-performing Debt Investments.
The investment principal arising from the matured entrusted loans will be partially recycled into investments with a longer investment horizon, such as private debt and mezzanine Funds, under the Investment Management Business, with a view to generating a sustainable long-term return.
Our Loan and Debt Investments Portfolio
As of 31 December 2021, our total outstanding loans and Debt Investments receivable were approximately RMB175,641,000 and RMB18,494,915,000 respectively. Approximately more than 90.0% of the loans offered to and undertaken by our customers and Debt Investments will mature within one (1) year.
- Loan Book Size: S$3.5bn of Debt Investments (at amortised costs) and Microfinance Loans as at 31 Dec 2021
- Effective Interest Rate for Debt Investments (at amortised costs): 10.1% as at 31 Dec 2021
- Collateral Coverage Ratio for Debt Investments (at amortised costs): 1.3x as at 31 Dec 2021
- NPL Ratio: 16.3% as at 31 Dec 2021