Understanding Autobacked Asset in China Richard Yi Wangjin

Understanding Auto-backed Asset in China Richard Yi Wangjin Financial

CONTENTS 2 1 Opportunties and Challenges of Autobacked Loan 2 Wangjin's Success in Auto-backed Loan 3 Risk Management for Auto-backed Loan Wangjin Financial

CONTENTS 3 1 Opportunties and Challenges of Autobacked Loan 2 Wangjin's Success in Auto-backed Loan 3 Risk Management for Auto-backed Loan Wangjin Financial

What's Auto-backed Loan? Auto-backed loan is essentially auto-equity loan, which is rare in US, but getting popular in China among non-prime population Why Popular in China? Asset side Loan Type 4 1. Underserved credit needs for small and micro companies 2. Automobiles are common valuable liquid assets, good for collaterals 3. Innovative title loan with “Collateral registration (Lien Recording) + GPS tracking” • Title loan: Requires title collateral Capital registration + GPS but borrower can sidetracking side continue to use their cars during the life of the loan • Custody Loan: Cars in custody over the life the loan, used for hightouna. cn credit risk borrowers Big-data based risk management Wangjin Financial

Fast-Growing Market Auto-backed loan (Auto-equity) market is expected to grow by 30% annually in next 5 years Expected Annual Growth Rate from 2019 to 2023: 31% Source: Frost & Sullivan， 1 RMB=0. 15$ Daiba car loan 5 Wangjin Financial

Auto-back Loan Industry is consolidating Due to the tightening regulations and competition, the industry is in the process of cleaning up and consolidating Wangjin Asset side Capital side Source: Frost & Sullivan. Daiba touna. cn car loan 6 Wangjin Financial

Major Risks & Challenges The success of a auto-back loan business depends on how well to handle these risks and challenges Risk Challenges Wangjin v Fraud • Lack of nationwide pooled data for non-prime population v Credit • Lack of nationwide credit rating system, lack of effective credit bureau data • Appraisal risk, monitoring, disposal Asset risk Capital v Collateral side v Operation • Labor intensive, Integrity v Funding • Lack of affordable funding v Regulation 7 side • Uncertain, rigid, one size fits all Daiba car loan touna. cn Wangjin Financial

CONTENTS 8 1 Opportunties and Challenges of Autobacked Loan 2 Wangjin's Success in Auto-backed Loan 3 Risk Management for Auto-backed Loan Wangjin Financial

About Wangjin Financial is a leading Tech. Fin company in China, founded in 2012 and specialized in auto-backed loan business, and provides safe, convenient inclusive financial services for small and micro entrepreneurs and individuals Mission To make it easy to access credit anywhere To develop and promote inclusive financial Capital services, and build side a company that lasts at least 100 years while making customers most satisfied Big-data based risk management Vision Daiba car loan 9 touna. cn Wangjin Financial

Business Model Wangjin has built online platform and offline network to facilitate the auto -back loans efficiently and effectively Wangjin Funding (Investors) Touna. cn 10 Big-data based risk management Asset (Borrowers） Institutions Auto backed Loans Wangjin Financial

Online Platform+ Offline Network Wangjin has built online platform and offline network to facilitate the auto -back loans efficiently and effectively Offline Nationwide Service Centers (170+) Wangjin Diversified Funding Channels n Individual client：middle class and mass affluent class. Touna. cn, a leading online P 2 P platform n Banking institutions, Wangjin Group has already cooperated with a number of banks to help inclusive finance through bank lending and direct banking. Funding (Investors) n Insurance institution，Wangjin Group has already cooperated with three insurance companies. It is working with the PICC Auto backed Loans n Other instituions，at present, the financial institutions Touna. cn 11 Institutions that Wangjin Group has cooperated include financial leasing companies, trust companies, securities companies, guarantee companies and consumer finance companies. Wangjin Financial

Operating Data Wangjin has been one of established top leading players in Auto-backed loan market 70. 2 billion 5. 8 million 7. 8 billion 462 thousand 71 thousand 9. 7 month Cumulative Loan Amount Registered Users Cumulative Borrowers Average Loan Amount （Amount in RMB, 1 RMB=0. 15$, 3/27） 12 Loan Balance Average Loan Tenure Data as of Wangjin Financial

Successful Risk Control Wangjin has put the risk well under control during industry turmoil last year and is well positioned for riding on the future industry growth FPDV 4+: First Payment Default (4+ days past due) • Profitable since 2016, even in turbulent 2018 13 Wangjin Financial

CONTENTS 14 1 Opportunties and Challenges of Autobacked Loan 2 Wangjin's Success in Auto-backed Loan 3 Risk Management for Auto-backed Loan Wangjin Financial

Risk Management Principle Small-amount, Collateral, Scattered and Directly-operated(companyowned) Small-amount： Average 70 k RMB Range: 20 k ~200 k Scattered： Borrowers scattered across regions and industries 15 Smallamount Collateral Scattered Directlyoperated Wangjin Financial Collateral： Use car title or car as collateral with good liquidity Directly-operated： Company-owned service centers, better operational control than touna. cn franchised

Risk Management System (RMS) RMS consists of six sub-systems which collectively mitigate the fraud, credit and operational risk effectively Origination System Decision Engine Car Appraisal RMS Collections Anti-Fraud Big Data Platform 16 Wangjin Financial

Full Life Cycle Risk Control Centralized big data risk review system plus offline outlet network ensures effective full life cycle risk control Acquisition n n Portfolio Management Initial evaluation at offline outlets: outlet underwriters evaluate the risk of borrowers and the value of collateral Big data final review at headquarters： Utilize third-party data to further assess fraud and credit risk and the value of the collateral as needed n GPS Monitoring: Proprietary GPS tracking n system to detect abnormal activities n Internal audit : Regular and rigorous internal audit to ensure the strategies and procedures are being followed correctly Extensive channels of cooperation >30 Third Parties 17 Wangjin Financial Collections Combination of telephone collection, external collection and legal collection: optimize the collection treatment and timing based on delinquency severity and customer situation, balancing the cure rate and customer satisfaction

Credit Scorecards Illustration of major scorecards. Auto-decisions account for about 65% Anti-fraud scorecard Acquisition Data l l Strategies Decision l Application data l Repayment records l GPS data D C 0 -160 161 -320 321 -480 481 -640 641 -800 High Medium Low Auto Rejecte d Manual Auto Approval E Collections 18 l Application data l Repayment record l Online borrowing data Repayment behavior scorecard Portfolio management Modeling Face recognition Blacklist ID authentication Telecom data Wangjin Financial B A

Fin. Tech Applications Technology is used to refine the management of full life cycle Fintech Mobile Applications Origination APP Order tracking APP Collection 19 Appraisal APP Intelligent Decision Engine Origination System Touna Financial Management GPS Portfolio Risk Control System GPS Tracking System Big Data Analysis and Applications Customer Scorecard Big data credit investigation Intelligent Applications Anti. Fraud System Intelligent Payment Intelligent Monitoring Platform Intelligent Customer Service Wangjin Financial

Fin. Tech Strategy Continues to use Fin. Tech to refine business from the following six dimensions Scenario Mobility Platform Fin. Tech Automation Datamation Intelligent 20 Wangjin Financial

Top Compliant Company Compliance is deemed as the top priority while Wangjin has been in compliance with regulations in a timely manner Touna. cn , as one of leading P 2 Ps, is in the nationwide P 2 P registration process Membershi Compliance p 21 Touna. cn – Submitted self-inspection report in Oct 2018 and had subsequent onsite inspections done by local authorities in Dec 2018 pursuant to regulations Touna. cn -- TOP 2 most compliant P 2 Ps in 201902 ranked by the leading P 2 P Portal WDZJ. COM Wangjin Financial

Active Members of Industry Organizations Wangjin takes active roles in major organizations to promote the compliant, sustainable business practices 【Boao Forum for Asia】 【National Internet Finance Association of China】---VP Level 【Guangdong Internet Finance Association】------VP Level 【Shenzhen Internet Finance Association】------VP Level Membership 【Guangdong Consumer Finance Protection Industry Association 】 【China Auto Loan Alliance】------VP Level 22 Wangjin Financial

Thank You 23 Wangjin Financial