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Shenma Finance expands electric-vehicle loans in rural China



ImpactAlpha, May 9 – Basic electric vehicles are popular in China’s rural areas, particularly for farmers transporting goods.

Last July, the Shandong Automobile Manufacturers Association reported that 283,000 such vehicles were sold in Shandong, one of China’s major agricultural regions. But rural operators don’t benefit from the government’s hefty subsidies for other electric vehicles because the simple two-, three-, and four-wheel vehicles they use don’t qualify.

Shenma Finance (also Shenma Jirong), a Shanghai-based fintech company is filling the financing gap with no-interest installment loans to rural Chinese to purchase two- and three-wheel electric vehicles via a network of thousands of dealers in more than 2,500 counties and towns.

Shenma Finance raised $47.3 million in Series C financing, led by China Growth Capital, Hina Group and Tongbanjie Group. Credit Ease Financial Industry Investment Fund and ChinaEquity Group, which previously invested, also backed the round. Launched January 2015, Shenma Finance initially focused on electric-powered scooters.

Shenma Finance used its $15 million Series B financing in 2016 to prove out its ability to extend financial services to underserved rural areas. The new financing will allow it to go after the potentially huge market for rural vehicle finance. “The rural mobility market is worth a trillion yuan ($157 billion) as it has a huge demand base and stable replacement cycle, as well as low penetration rate for financial service,” Hina Group’s Leon Wang said.

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