Asset-backed securities (ABS) financing is gaining momentum among internet platform-affiliated small loan companies. Recent weeks witnessed concentrated approvals for ABS projects from leading players including ByteDance, Du Xiaoman, JD.com, and Meituan. Du Xiaoman Small Loan Co.'s proposed 9-billion-yuan ABS, submitted on June 6, cleared approval in merely six days by June 12.

"Regulators recognize these platforms' underlying assets as controllable risks, trusting tech giants' risk management capabilities," remarked Xu Bei, Secretary-General of the Guangdong Provincial Association of Small Loan Companies. "Platforms with established consumption ecosystems effectively gauge repayment capacity and commitment." An industry insider added that volume controls remain to prevent excessive credit services and over-financialization.

The approvals signal dual regulatory shifts, according to Wang Pengbo, senior analyst at Botong Analysis: "First, support for normalized online micro-lending operations has strengthened since the National Financial Regulatory Administration's establishment, accelerating industry standardization. Second, exchanges now facilitate leading institutions' liquidity replenishment through standardized instruments to bolster consumer and inclusive finance."

Recent milestones include: - JD.com's Shengji Small Loan securing 9.9-billion-yuan approval for its "JD Technology Shengying Phase 3" ABS on July 9 via Shanghai Stock Exchange - Douyin-affiliated Zhongrong Small Loan obtaining dual 9-billion-yuan ABS approvals from Shenzhen Stock Exchange on June 28, plus a 10-billion-yuan Shanghai-listed project feedback on June 23 - Meituan's 9-billion-yuan ABS for small business financing accepted on July 3

This wave features internet giants' licensed lending units with robust capital and compliance records, executing large-scale projects typically ranging from 5 to 10 billion yuan. "ABS enables rapid capital recycling," explained a Shenzhen-based small loan deputy general manager. "It optimizes balance sheets, lowers funding costs, and creates virtuous cycles for credit expansion while mitigating risk exposure through asset offloading."

Industry data confirms the acceleration: Small loan ABS issuances surged 61% YoY to 50 deals during January-July 2025, with volumes skyrocketing 105% to 36.331 billion yuan. Su Xirui, senior researcher at Suxi Zhiyan, attributes this to regulatory tailwinds like the newly implemented "Small Loan Company Supervision Measures" which quadrupled ABS leverage limits to four times net assets. "Shelf registrations allow phased issuances post-approval, while low-rate environments enhance funding advantages," she noted.

Regulatory scrutiny focuses on three pillars: 1. Asset quality: Underlying loans must comply with 24% annual rate caps and "small-sum, dispersed" principles 2. Fund deployment: Strict prohibition against improper lending and leverage excesses 3. Operational compliance: Adherence to collection practices, youth lending restrictions, and partner oversight

"Approvals demonstrate leading small loan firms' emerging market value," concluded Su Xirui. "The capital infusion establishes critical foundations for consumption stimulus and real economy support."