In the first half of 2024, faced with a continuously sluggish macroeconomic condition and weakened consumption and credit demand, the Group promptly adjusted its operating strategies by tightening risk control to mitigate borrower credit risk and asset quality depreciation, while also implemented cost control measures to improve operational efficiency. Loan origination volume in the Period recorded RMB 27.02 billion.

During the Period, to enhance risk control, the Group utilised new data sources to upgrade through iterations its risk model, and also adjusted its credit line policies to lower the average risk exposure at the customer level. By applying a more comprehensive dimensions for assessing borrower characteristics, the Group improved the quality of its approval process. These updates have enabled the Group’s ongoing targeting of higher-quality borrowers in terms of assets, achieving a balance between short-term risk and long-term returns.

Launching the ‘Sunbird AI Hub’ AI large model, investing in technology to enhance operational efficiency

Artificial intelligence (AI) technology is developing rapidly, and the Group is actively investing in research and development in this area, and thus applied AI in its business technology to improve operational efficiency. In the first half of 2024, the Group officially has launched the its AI large model ‘Sunbird AI Hub’, and deployed it across several aspects of business. ‘Sunbird AI Hub’ can summarise large amounts of dialogue texts, and significantly improve the quality of customer service statistics and quality control through its application to intelligent credit. It is also aiding in code generation by helping R&D staff to focus on the design and improvement of data structure and system architecture.

In the office setting, AI is being utilized with VQuickMind 2.0 which was put into service during the Period. VQuickMind 2.0 enables employees to create content in addition to the original question-and-answer interaction function, thus improving office efficiency. Other AI initiatives during the Period include an iterative upgrade of our core risk control system Hummingbird with the help of AI technology in the field of specialised modeling, thereby improving the operational efficiency of our risk control and reducing operational risks by revamping the rules engine.

Diversify customer acquisition channels to acquire high-quality new customers, optimise user experience to maintain customer loyalty

The Group actively expanded the network of high-quality customer acquisition channels and enhanced customer acquisition efficiency. During the Period, the Group reached cooperation agreements with leading food delivery platforms and other high-quality channels which better enable us to enhance customer interaction and to acquire new high-quality customers. As of June 2024, our cumulative number of registered users reached 149.1 million, an increase of 9.8% over the first half of 2023.

Apart from acquiring new high-quality customers, the Group continued to optimise its existing user operation strategy. The Group has upgraded services at various points in the business process to shorten the time taken to issue and disburse loans and reduce the operation path for users, to provide users with a safer and more convenient and caring user experience. In the first half of 2024, repeat customers accounted for 89.5% of total loan volume.

Continuously strengthen cooperation with external funding sources, implement multiple measures to reduce financing costs

As of June 2024, the Group have established long-term relationships with 109 external funding partners, including national joint-stock commercial banks, consumer finance companies and trust funds, etc., thus growing a rich and diversified funding pool. In addition, the Group also improved capital management with the construction of the VCREDIT fund management platform system, which continuously improves the efficiency of its funding operation, and steadily reduces the cost of funds.

Develop new business beyond mainland China, CreFIT partners with China Mobile Hong Kong

Apart from developing the existing consumer finance business, the Group also consolidated new business initiatives outside of Mainland China. In May 2024, its Hong Kong-based online consumer finance brand ‘CreFIT’ became the first money lender in Hong Kong to cooperate with China Mobile Hong Kong to provide consumer finance products to their customers. CreFIT will look for opportunities to align with additional quality customer acquisition channels and develop mutually beneficial cooperation across cross-industry online platforms and widen access to users with a tailored instalment experience that can truly match real consumer finance scenarios.

Outlook

In order to contribute to further growth in consumer finance business and fulfil the financial needs of high-quality customers, the Group will continue to hone business strategies and upscale technology. In addition to growing the existing consumer finance business in China, the Group will also look to expand and diversify its business strategies by investing or collaborating in or acquiring similar, related, or complementary businesses and industries in other jurisdictions including Hong Kong, South-East Asia and Europe. The Group will continue to review potential investment opportunities and business prospects on a constant basis and make suitable investments and acquisitions as opportunities occur.

In addition, the Group intends to continue to execute these strategies to maintain its growth in the industry, including streamline and extend its credit solutions to better serve its customers to improve brand recognition and loyalty and creditworthiness of its customer base; enhance risk management capability through deployment of evolving technology and artificial intelligence; strengthen long-term collaborations with licensed financial institutional partners and other business partners; ensure its business is conducted within applicable regulatory parameters to achieve regulation-centric sustainability; review and assess potential business prospects and invest or collaborate in or acquire similar, related or complementary businesses and industries in China and other jurisdictions; cultivate a dynamic enterprise value and culture and grow its in-house talents.

About VCREDIT Holdings Limited

VCREDIT Holdings Limited (VCREDIT) is a leading independent online consumer finance service provider in China. With 18 years of experience in consumer finance innovation, the Group has established a cutting-edge position in credit risk quantification and intelligent risk management, which are core to financial services. VCREDIT's proprietary "Hummingbird" risk management system and smart lending robot provide state-of-the-art integrated solutions to licensed financial institutions, allowing them to offer customized, accessible financial services to underserved borrowers across China. VCREDIT made its debut on the main board of the Hong Kong Stock Exchange on June 21, 2018, with the ticker symbol 2003.HK.

Website: https://en.vcredit.com/en-us