Chinese e-commerce conglomerate, Alibaba has announced thatit intends to provide micro-financing services to European firms through a newpartnership with two UK working capital startups, ezbob and iwoca.According tothe announcement, ezbob and iwoca will act the middle man to the European SMEmarket, offering loans of up to £50,000 at interest rates of 0.75% to 2%monthly and will lend the money to small businesses that fail to obtainfinancing from traditional bank lenders.
Commenting on the deal, Wei Duan, Alibaba.com’s Europeanmarketing and business development director said, “We want to make financing aseasy as possible for the millions of British companies that do business throughAlibaba.com.” The deal comes afterAlibaba entered a similar partnership with P2P loan platform Lending Club inthe US and highlights Alibaba’s push to expand its influence beyond the Chinesemarketplace.
With alternative financing becoming an increasinglymainstream, the move by Alibaba highlights that SMEs no longer have to rely ontraditional lenders for financing. Providers like ezbob and iwoca, Lending Cluband Funding Circle among others can all facilitate financing in the post 2008global economic and financial crisis landscape. While it remains only a smallsegment, it has the potential to sharply change how lending is carried out forSMEs in the near future.