1. Understanding Auto-backed Asset in China
Richard Yi
Wangjin Financial

2. CONTENTS 1 2 3 Opportunties and Challenges of Auto-backed Loan
Wangjin's Success in Auto-backed Loan 2
Risk Management for Auto-backed Loan 3

3. CONTENTS 1 2 3 Opportunties and Challenges of Auto-backed Loan
Wangjin's Success in Auto-backed Loan 2
Risk Management for Auto-backed Loan 3

4. What's Auto-backed Loan?
Auto-backed loan is essentially auto-equity loan, which is rare in US, but getting popular in China among non-prime population
Underserved credit needs for small and micro companies
Automobiles are common valuable liquid assets, good for collaterals
Innovative title loan with “Collateral registration (Lien Recording) + GPS tracking”
Why Popular in China?
Loan Type
Title loan: Requires title collateral registration + GPS tracking but borrower can continue to use their cars during the life of the loan
Custody Loan: Cars in custody over the life the loan, used for high credit risk borrowers
Asset
side
Capital
side
Big-data based risk management
Capital
side
touna.cn

5. Fast-Growing Market
Auto-backed loan (Auto-equity) market is expected to grow by 30% annually in next 5 years
Expected Annual Growth Rate from 2019 to 2023: 31%
Source: Frost & Sullivan， 1RMB=0.15$
Daiba
car loan

6. Auto-back Loan Industry is consolidating
Due to the tightening regulations and competition, the industry is in the process of cleaning up and consolidating
Wangjin
Asset
side
Capital
side
Source: Frost & Sullivan
Daiba
car loan
touna.cn

7. Major Risks & Challenges
The success of a auto-back loan business depends on how well to handle these risks and challenges
Risk
Challenges
Fraud
Lack of nationwide pooled data for non-prime population
Credit
Lack of nationwide credit rating system, lack of effective credit bureau data
Collateral
Appraisal risk, monitoring, disposal risk
Operation
Labor intensive, Integrity
Funding
Lack of affordable funding
Regulation
Uncertain, rigid, one size fits all
Wangjin
Asset
side
Capital
side
Daiba
car loan
touna.cn

8. CONTENTS 1 2 3 Opportunties and Challenges of Auto-backed Loan
Wangjin's Success in Auto-backed Loan 2
Risk Management for Auto-backed Loan 3

9. About Wangjin Mission Vision To make it easy to access credit anywhere
Wangjin Financial is a leading TechFin company in China, founded in and specialized in auto-backed loan business, and provides safe, convenient inclusive financial services for small and micro entrepreneurs and individuals
Mission
To make it easy to access credit anywhere
Vision
To develop and promote inclusive financial services, and build a company that lasts at least 100 years while making customers most satisfied
Capital
side
Big-data based risk management
Daiba
car loan
touna.cn

10. Big-data based risk management
Business Model
Wangjin has built online platform and offline network to facilitate the auto-back loans efficiently and effectively
Wangjin
Funding (Investors)
Big-data based risk management
Asset
(Borrowers）
Touna.cn
Institutions
Auto backed Loans

11. Offline Nationwide Service Centers (170+) Diversified Funding Channels
Online Platform+ Offline Network
Wangjin has built online platform and offline network to facilitate the auto-back loans efficiently and effectively
Offline Nationwide Service Centers (170+)
Diversified Funding Channels
Wangjin
Individual client：middle class and mass affluent class. Touna.cn, a leading online P2P platform
Banking institutions, Wangjin Group has already cooperated with a number of banks to help inclusive finance through bank lending and direct banking.
Funding (Investors)
Insurance institution，Wangjin Group has already cooperated with three insurance companies. It is working with the PICC
Auto backed Loans
Other instituions，at present, the financial institutions that Wangjin Group has cooperated include financial leasing companies, trust companies, securities companies, guarantee companies and consumer finance companies.
Touna.cn
Institutions

12. 70.2 billion 5.8 million 7.8 billion 462thousand 71thousand 9.7month
Operating Data
Wangjin has been one of established top leading players in Auto-backed loan market
70.2 billion
Cumulative Loan Amount
5.8 million
Registered Users
7.8 billion
Loan Balance
462thousand
Cumulative Borrowers
71thousand
Average Loan Amount
9.7month
Average Loan Tenure
（Amount in RMB, 1RMB=0.15$, Data as of 3/27）

13. Profitable since 2016, even in turbulent 2018
Successful Risk Control
Wangjin has put the risk well under control during industry turmoil last year and is well positioned for riding on the future industry growth
FPDV4+: First Payment Default (4+ days past due)
Profitable since 2016, even in turbulent 2018

14. CONTENTS 1 2 3 Opportunties and Challenges of Auto-backed Loan
Wangjin's Success in Auto-backed Loan 2
Risk Management for Auto-backed Loan 3

15. Risk Management Principle
Small-amount, Collateral, Scattered and Directly-operated(company-owned)
Small- amount
Collateral
Directly- operated
Scattered
Small-amount：
Average 70k RMB
Range: 20k ~200k
Collateral：
Use car title or car as collateral with good liquidity
Scattered：
Borrowers scattered across regions and industries
Directly-operated：
Company-owned service centers, better operational control than franchised
touna.cn

16. RMS Risk Management System (RMS)
RMS consists of six sub-systems which collectively mitigate the fraud, credit and operational risk effectively
RMS
Origination System
Car Appraisal
Anti-Fraud
Big Data Platform
Collections
Decision Engine

17. Extensive channels of cooperation
Full Life Cycle Risk Control
Centralized big data risk review system plus offline outlet network ensures effective full life cycle risk control
Acquisition
Portfolio Management
Collections
Initial evaluation at offline outlets: outlet underwriters evaluate the risk of borrowers and the value of collateral
Big data final review at headquarters：Utilize third-party data to further assess fraud and credit risk and the value of the collateral as needed
GPS Monitoring: Proprietary GPS tracking system to detect abnormal activities
Internal audit : Regular and rigorous internal audit to ensure the strategies and procedures are being followed correctly
Combination of telephone collection, external collection and legal collection: optimize the collection treatment and timing based on delinquency severity and customer situation, balancing the cure rate and customer satisfaction
Extensive channels of cooperation
>30
Third Parties

18. Credit Scorecards
Illustration of major scorecards. Auto-decisions account for about 65%
Anti-fraud scorecard
Face recognition
Blacklist
ID authentication
Telecom data
Application data
Repayment record
Online borrowing data
Acquisition
Repayment behavior scorecard
Application data
Repayment
records
GPS data
Data
Strategies
Portfolio management
Modeling
Decision E D C B A
0-160
High
Medium
Medium Low
Low
Auto Rejected
Manual
Auto Approval
Collections

19. FinTech Applications Fintech
Technology is used to refine the management of full life cycle
Fintech
Mobile Applications
Intelligent Decision Engine
Big Data Analysis and Applications
Intelligent Applications
OriginationAPP
Anti-Fraud System
Origination System
AppraisalAPP
Customer Scorecard
Intelligent Payment
Portfolio Risk Control System
Order tracking APP
Touna Financial Management
Big data credit investigation
GPS Tracking System
Intelligent Customer Service
Intelligent Monitoring Platform
Collection
GPS

20. FinTech Strategy FinTech
Continues to use FinTech to refine business from the following six dimensions
FinTech
Scenario
Platform
Datamation
Intelligent
Automation
Mobility

21. Membership Compliance Top Compliant Company
Compliance is deemed as the top priority while Wangjin has been in compliance with regulations in a timely manner
Touna.cn , as one of leading P2Ps, is in the nationwide P2P registration process
Touna.cn – Submitted self-inspection report in Oct 2018 and had subsequent onsite inspections done by local authorities in Dec 2018 pursuant to regulations
Touna.cn -- TOP2 most compliant P2Ps in ranked by the leading P2P Portal WDZJ.COM
Membership
Compliance

22. Membership Active Members of Industry Organizations
Wangjin takes active roles in major organizations to promote the compliant, sustainable business practices
【Boao Forum for Asia】
【National Internet Finance Association of China】---VP Level
【Guangdong Internet Finance Association】------VP Level
【Shenzhen Internet Finance Association】------VP Level
【Guangdong Consumer Finance Protection Industry Association】
【China Auto Loan Alliance】------VP Level
Membership

23. Thank You