This document summarizes Ant Financial's rural finance practices in China. It outlines that rural areas face credit constraints due to limited credit histories, information, and financial institution presence compared to urban areas. Ant Financial aims to address these issues through a three phase approach: 1) online and offline lending partnerships, 2) supply chain finance, and 3) a digitalized platform to integrate financial services for counties. The goal is to use data and technology to provide tailored financial services to farmers and agricultural industries in rural communities.

1. OUR RURAL
FINANCE PRACTICE

2. Number of people that have
a credit record
4:1
Urban vs. Rural
Funding shortage
in rural areas
3.05
Trillion RMB
Number of people employed
by FIs per 10,000 people
329:1
Urban vs. Rural
Availability of formal credit
in rural areas
Note: Data as of Dec 2015
A Snapshot of China’s Rural Finance Environment
29.4%

3. High Operating
& Risk Costs
Limited
Information &
Assets
Credit
Constraints in
Rural Finance
Demand-side
Rural Borrowers
Supply-side
Rural FIs
Key Issues
Key Pain Points

4. Rural Finance
Model
High Operating
& Risk Costs
Limited
Information &
Assets
Demand-side
Rural Borrowers
Supply-side
Rural FIs
Key Pain Points
Data
Tech
Integrated Solutions

5. ANT FINANCIAL
• Ant Financial is a technology company that brings inclusive financial services to the world.
• Ant Financial was officially founded in October 2014 and originated from Alipay, founded in 2004.
• Ant Financial is dedicated to bringing the world more equal opportunities by building a technology-
driven open ecosystem and working with other financial institutions to support the future financial
needs of society.

6. Rural Areas
Agriculture
Farmers
Rural Finance
Ant
Insurance
Integrated solutions
Ant Financial & Rural Finance Business

7. A Roadmap of Ant Financial Rural Finance
Phase 1: 2015-2016
• Rural Taobao: Rural Taobao
partners and their customers
• CFPA Mircofinance: Covering
85% of poverty-stricken counties
and 82% of women in villages
Online lending model
Online + offline lending model
Phase 2: 2016-2018 Phase 3: 2017-2018
• Households breeding cattle, pigs,
or poultry (New model of
Agriculture Households)
• Downstream rural dealers
Supply chain finance model Digitalized platform model
• Mass rural residents in county
level or below

8. Development phase of Ant Financial rural finance
• Ant Financial uses big data and AI algorithms to provide loans to SMEs and rural farmers called the “310” model: 3
minutes to apply for credit in bringing convenience to people, 1 second to approve based on substantial
background analysis, and 0 people involved in the decision that to make sure the process is fully automated,
• In counties and villages that with limited access to established financial services, we work with offline
acquaintances such as Alibaba Rural Taobao partners and CFPA Microfinance and provide users with various of
financial services including loans. The initiative has introduced across China including some poverty-stricken
counties.
• Rural Taobao: Rural Taobao partners and their customers
• CFPA Microfinance: Covering 85% of poverty-stricken counties
and 82% of women in villages
O n l i n e a n d o f f l i n e l e n d i n g m o d e l
Phase 1: 2015-2016
O n l i n e l e n d i n g m o d e l

9. Ant Financial rural finance concept
Inclusive
concept
1
Charitable
mentality
2
Commercially-
oriented
principle
3
Power of
ecosystem
5
Technology-
driven
innovation
4

10. • The supply chain finance model is to lead agricultural material & implements with high quality to rural areas,
and agricultural products with high quality going to urban.
• By connecting the management system of agri-enterprises, we lend to the customers who have long term
business relationship with the big enterprises with non-cash Loan. The borrower can only use such kind of
loan to purchase raw material online. There is no guarantee needed, no insurance involved, and it is also 310
experience.
• Households breeding cattle, pigs, or poultry (New model
of Agriculture Households)
• Downstream rural dealers
Phase 2: 2016-2018
S u p p l y c h a i n f i n a n c e m o d e l
Development phase of Ant Financial rural finance

11. • Work with financial institutions to build a Joint Loan platform with digital risk management capability that is
designed for residents of county-level and below, so as to extend financial institutions’ footprint to grassroots
and promote the growth of inclusive finance.
• Work with county-level governments to build a platform to provide local public services. The financial services
are embedded in it. With the spreading of platform by local governments, inclusive finance get well known as
well.
• Mass rural residents of county level and below
Phase 3: 2017-2018
D i g i t a l i z e d p l a t f o r m m o d e l
( i n c l u s i v e f i n a n c e i n r u r a l a r e a s )
Development phase of Ant Financial rural finance

12. Smart transportation
Public Housing
Social insurance
Utilities
Smart
food market
Disaster alert
Education
Entertainment
Local official
hotline
Visit doctor
Fee payment
Inclusive finance
in rural areas
Ant Financial rural finance-Inclusive finance at county-level
• Xintai County, Shandong
• Qixia County, Shandong
• Zhucheng County,
Shandong
• Zoucheng County,
Shandong
• Cao County, Shandong
• Badong County, Hubei
• Lichuan County, Hubei
• Yuanan County, Hubei
……
• Neixiang County, Henan
• Lankao County, Henan
• Sheqi County, Henan
• Fengqiu County, Henan
• Ningling County, Henan
• Yucheng County, Henan
• Yongcheng County,
Henan
• Anji County, Zhejiang
• Tongwei County, Gansu
• Linyao County, Gansu

13. Online lending model
Online + offline lending model
Supply chain
finance model
Digitalized
platform model
……
Data
input
Resource
integration
Risk control
and
management
Product
R&D
Financing
Farmers
Agricultural
Industry
Rural finance focuses on farmers and agricultural industries
offering tailor-made financial services to them

14. THANK YOU