JD.com and ZestFinance Announce JV to Expand Consumer Credit in China

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Companies to leverage big data to provide credit risk evaluation services to lenders in China

BEIJING, CHINA and LOS ANGELES, CA. – June 26, 2015: JD.com (Nasdaq:JD), China’s largest online direct sales company, and ZestFinance, a US-based financial technology company, today announced an agreement to launch a joint venture (JV), called JD-ZestFinance Gaia, to support the development of consumer credit in China. The JV will leverage ZestFinance’s machine learning-based credit-decisioning technology and JD.com’s reservoir of consumer data to provide credit risk evaluation services to companies in China. Additionally, as part of the agreement, JD.com is making an investment in ZestFinance to help fund further development of credit risk evaluation services for China and extend consumer access to credit.

"Chinese shoppers are hungry for convenient, reliable and fair credit channels,” said JD Finance CEO Shengqiang Chen. “This requires both a systematic method for making decisions and a robust infrastructure that enables lenders to share data – neither of which is sufficiently developed yet in China. Today's announcement with ZestFinance, a leader in consumer credit evaluation, is a foundational step toward building a reliable system for assessing credit risk that will help meet the huge market need. We aim to be the single-stop solution for Chinese consumers to make all of their daily purchases, and this new JV with ZestFinance is another big step in our development.”

Lenders in China lack the data typically used in established markets to determine creditworthiness, as Chinese consumers often have little-to-no credit history, leaving a huge gap. The ZestFinance big data credit-decisioning platform is highly applicable to the Chinese market because it accurately underwrites people without credit history. Instead of analyzing the limited number of credit variables most traditional underwriting methods consider, ZestFinance analyzes tens of thousands of data points to effectively evaluate creditworthiness. ZestFinance’s big data approach considers information that traditional underwriting methods do not – such as anonymized consumers’ online shopping habits. This technology will enable lenders in China to effectively predict risk, which, in turn, will expand Chinese consumers’ access to fair credit.

“At ZestFinance, our mission is to provide fair and transparent credit to everyone everywhere in the world,” said Douglas Merrill, Founder and CEO of ZestFinance. “We’re excited to work with JD.com to create powerful consumer credit evaluation in China. As China uses advanced data science to make credit decisions, its underwriting will likely leapfrog approaches used by most lenders in established markets, which are based on technology created decades ago.”

The JV will provide credit risk evaluation services to companies in China JD-ZestFinance Gaia will develop and provide services that enable companies to determine creditworthiness of Chinese consumers, greatly expanding access to credit. It will combine JD.com’s base of more than 100 million active customers – with ZestFinance’s machine learning underwriting technology, to create credit risk evaluation services designed specifically for China.

As the first customer of the JV, JD.com will use the services to provide new credit offerings to consumers.