Yale School of Management (SOM) and Renmin University of China School of Business (RBS) have completed their first joint case study. The case, "Ant Financial: Flourishing Farmer Loans at MYbank," examines Alibaba affiliate Ant Financial as it uses financial technology to provide rural banking and credit ratings in China. Yale SOM Professor K. Sudhir, one of the case authors, will teach the new case this spring in the capstone course of Yale's MBA core curriculum.
The case takes place in 2015, when Ant Financial’s MYbank (an offshoot of Jack Ma’s Alibaba company) was looking to extend services to rural areas in China through its Flourishing Farmer Loan program. MYbank relied on the internet to communicate with loan applicants and judge their credit worthiness. Initial tests of the program had proved promising, but could MYbank operate the program at scale? Would its big data and technical analysis provide an accurate measure of credit risk for loans to small customers? Could MYbank rely on its new credit-scoring system to reduce operating costs to make the program sustainable?
The case requires students to consider the operational, financial and marketing aspects of new FinTech (credit-scoring, internet banking) in China.
- From a finance perspective, the case raises questions about how best to assess the credit-worthiness of individual clients.
- From an operations perspective, the case illustrates how new innovations such as credit-scoring can reduce costs for financial services firms.
- From a marketing perspective, the case considers how financing interacts with consumer purchasing.
Leveraging Yale SOM’s “raw”case template, the case includes 16 webpages of content, more than 45 external resources (e.g., news reports, price data, charts, financial statements), and 20 on-site interviews and ancillary videos.
The case has been in the works for more than six months, and will be taught for the first time in Yale SOM’s Executive course for the Core curriculum.