Part 1
Consumer finance is now unavoidable in today's culture. Consumer finance is a modern financial service model that offers consumer loans to people of all socioeconomic backgrounds. And the essence of it is that you can combine consumption and finance, with you can also combine scene consumption and finance, and sceneization is the key to consumer finance. There have been more diverse consumption scenes constructed depending on clothing, food, housing, and transportation (Tufano, P., 2009). The lines between finance and living have blurred as a result of this "scenario-based" development, and financial services have begun to permeate diverse consumer situations. Fully incorporated in many consumer situations, it can not only boost user stickiness, allowing consumers to have a sufficient sense of security and trust in products and platforms, and then take a vital step, but it can also extend the life cycle of consumer financial products. Ant Huabei and Jingdong Baitiao, for example, are based on Taobao and Jingdong consumption situations, respectively. Many campuses' first two years of consumption, as well as 3C items, medical care, and second-child loans, are all based on different consumption scenarios(Thomas, L.C., 2010).
Why has consumer finance grown in popularity? The market demand is robust since it fits the country's needs to encourage economic growth, and the rapid development of Internet finance still has enough profit margins! Various consumer financing organisations will strengthen sales advertising, continue to attract clients to enrich the scene, and fully extend the market in the competition exactly because of such huge profits(Sarin, N., 2019).
Finance for consumers ABS stands for asset securitization, and it is a financial asset securitization product based on consumer financial assets. Consumer financial assets are mainly online consumer loans these days, therefore it's also known as online consumer loan ABS, which allows online consumer loans to catch up with the mainstream financial markets-exchanges.
Consumer finance can be divided into licenced consumer finance companies, commercial banks (credit cards, consumer loans), online small loans, scene instalment platforms, e-commerce, and other Internet platforms based on the types of market participants; it can also be divided into Borrowing for the Internet and Borrowing Offline based on the different customer acquisition media(Allen, M.W., 2008). Jingdong Baitiao, Ant Huabei, Paipaidai, and others are examples of the former; modest loans and credit cards are examples of the latter.
Cash loans and commodity loans can be classified based on whether they rely on a specific consumption scenario: the former, such as Ant Borrowing and Jingdong Gold Bar; the latter, such as Ant Huabai and Jingdong Baitiao; and whether they use their own funds to lend, they can be classified as direct loans mode or loan assistance mode. Small lending firms and consumer finance companies utilise their own capital to lend; the latter, as a loan assistance institution, only uses its own funds for client acquisition and preliminary risk control, and the loan funds come from a third party(Xiao, J.J. and Xiao, J.J., 2016).
Huabei and minor loans are dispersed equally among credit cards. Credit cards, for example, are the instrument with the highest safety factor in consumer finance but the lowest issuer yield(Barr, M.S., 2014).
Reference list:
Tufano, P., 2009. Consumer finance. Annu. Rev. Financ. Econ., 1(1), pp.227-247.
Thomas, L.C., 2010. Consumer finance: Challenges for operational research. Journal of the Operational Research Society, 61(1), pp.41-52.
Sarin, N., 2019. Making consumer finance work. Columbia Law Review, 119(6), pp.1519-1596.
Allen, M.W., 2008. Consumer finance and parent-child communication. In Handbook of consumer finance research (pp. 351-361). Springer, New York, NY.
Xiao, J.J. and Xiao, J.J., 2016. Handbook of consumer finance research. Springer.
Barr, M.S., 2014. Mandatory arbitration in consumer finance and investor contracts. NYUJL & Bus., 11, p.793.
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