Our business process involves the acceptance of loan applications, conducting due diligence, assessments and approvals, the granting of loans, and post-loan grant reviews and collections.

Loan Application

Our business process begins with a loan applicant’s submission of a loan application, supplemented by information we require relating to such application. For example, an enterprise applicant must provide its business license, articles of association, tax certificates , asset appraisal report and board resolution or other appropriate authorization regarding the loan application. We also require the applicants who apply for revolving loans to provide additional documentation, such as bank statements and material business contracts. In the loan application, information such as the proposed size, term and use of the loan, whether the loan will be guaranteed or secured must also be provided.

Initial Review and Due Diligence

Our business department will conduct an initial review of the loan application and consider whether to accept a customer’s application pursuant to our application acceptance procedure. Upon the receipt of a loan application, our business department will designate two teams of business managers, while one team is designated as the project manager, to conduct customer due diligence in a loan application. One of our risk management managers or a designated employee will conduct parallel risk assessments for a loan application.

Assessment and Approval of Loans

Once a loan application passes the review of our business department and risk management department, a loan assessment meeting will be held. Depending on the loan size and transaction type, the loan applications will be subject to a final assessment and approval by our general manager, loan assessment committee, our Chairman or the Board of Directors, respectively.

Loan Granting

Once a loan application is approved through our assessment and approval process, our business department will prepare a loan contract and other relevant documentation, which are subject to the approval by the risk management department. We will then proceed with the signing of loan contracts and other documents, such as the guarantee, pledge or mortgage agreements.

Post-loan Grant Review, Extension and Collection

We conduct periodic reviews of our loan portfolio to monitor the risks associated with loans. Our review and evaluation focus on: (i) customers’ use of funds; (ii) the business operations of our customers as well as the industry and market in which the customers operate; (iii) the change of customers’ assets, revenue and cash flows; (iv) the source of funds for repayment; and (v) other situations which may adversely affect the risk profile of loans.

Depending on the risk profile of overdue loans, we may take necessary legal action, such as attaching the assets of our customers or the guarantors, freezing their bank accounts or foreclosure on the collateral by court order.