For many years, more than 100 million small businesses in China faced a major financial problem: they had a difficult time getting access to credit. Banks and other lending institutions rejected their requests, which led to frustration among SME owners. To compound the problem, there were more than 10,000 banks in the nation, each having its own unique lending criterion, and the process for banks to find and qualify small business loan candidates was an expensive and time consuming process. In a very real way, it was like a blindfolded matching game.
In 2018, Peak Positioning Technologies set to change the way Chinese financial institutions lend to SMEs. By creating new financing opportunities, reducing risk for lenders and building productive relationships among SMEs and lending bodies, the company changed, streamlined and significantly improved how lending takes place in the Chinese small business environment.
Today, the company, which recently rebranded itself as Peak Fintech Group (CNSX: PKK) (OTCQX:PKKFF) as part of a series of growth and expansion initiatives, manages a commercial lending ecosystem of lenders, brokers and borrowers in which transactions are conducted securely and efficiently.
“Lending to small and micro businesses has long been a scary proposition for banks and other lending institutions in China,” says Johnson Joseph, the company’s President and CEO since 2011. “But Peak Fintech Group is changing that by using AI and analytics to help any lender virtually eliminate the risks associated with lending to small and micro businesses.”
Since Peak’s inception, Johnson Joseph — a veteran financial leader who holds an MBA in Information Technology from HEC Montreal (formerly École des hautes études commerciales) and a Bachelor’s degree in Finance from Texas Tech University — and who previously served as an advisor at one of Canada’s largest mutual fund and asset management companies, has helped guide the company through a number of challenging periods, including some turbulent market conditions.
His leadership has helped Peak adapt and adjust its business model, eventually evolving what was initially a software development company into a well-established, multi-layered financial technology company.
Joseph’s vision of giving Canadian investors a well-managed and trustworthy vehicle to participate in some of China’s most promising tech sector opportunities is now the driving force behind Peak’s operations.
As of June 2020, Peak has worked with 50 lending institutions and 53,000 loan broker reps to provide $1.3 billion in loans to 24,000 qualified SMEs.
Intelligent Technology as the Key to Peak Fintech Group’s Success
Intelligent technology is the key to how Peak Fintech Group works.
Through its Cubeler Lending Hub ecosystem, an analytics and AI software platform, the company has created an ecosystem that brings together lenders, brokers, SMEs, data providers, and automated risk management capabilities. By automating the process by which lenders find and qualify borrowers across several market verticals, Peak is able to make commercial lending more efficient and profitable.
“These services allow banks and lenders to safely increase loan volumes, and give SMEs opportunities to get loans they would otherwise not get, which contributes to the efficiency of China’s commercial lending industry,” says Joseph.
From finding qualified clients to submitting leads and marketing financial products, the platform’s value proposition hinges on the fact that it does it all, providing a win-win for SMEs and lenders alike.
For SMEs, it’s free to sign up with Peak. The system eliminates the need for business owners to shop around for funding by delivering the lenders, as well as a variety of loan arrangements, to them. This increases their chances of getting funded, and they can be pre-qualified for credit to be accessed any time.
For banks and other lenders, there’s no longer a need to search for clients, as the platform brings ideal clients to them. Clients can be instantly qualified based on specific lending criteria, and risks are minimized.
Continued Growth for Peak Fintech Group and New Benefits for Clients
In 2018, Peak Fintech Group established a subsidiary, Asia Synergy Financial Capital (ASFC), in the Chinese city of Wuxi as a proof of concept related to system reliability. ASFC has experienced less than 2% loan defaults while generating $1.6 million in revenue.
The following year, Peak launched its Asia Synergy Supply Chain (ASSC) and Asia Synergy Credit Solution (ASCS) subsidiaries, supported with buy-in from banks and local lending institutions and enabling the company to expand to three more cities by end of 2019 and earn $11.7 million in revenue.
This year, in response to Peak receiving more than $15 billion in loan requests during 2018, the company acquired the Jinxiaoer loan brokerage platform, which added 40,000 loan sales reps and 2,700 loan brokerage companies in 31 cities across China. The company also established city-wide Financial Centres that are powered by Lending Hub, and has begun to replicate the Jiangyin model to other cities in China.
Peak Fintech Group is implementing a number of industry-specific solutions, including replicating its supply-chain model to such industries as trucking and vehicle dealerships. It has been expanding the funding ecosystem to serve online merchants in partnership with China’s largest e-commerce portals and is now exploring the possibility of expanding its services beyond China’s borders.
