Hexindai Inc. (NASDAQ: HX) rose Tuesday, after the company acquired a 5.88% stake in Phoenix Intelligent Credit Group Ltd for $29 million.
The Beijing-based Hexindai says the strategic investment is expected to help expand Hexindai's business.
Phoenix Financial is also operator of one of China's leading peer-to-peer lending (P2P) platforms, for a total consideration of approximately $29 million U.S. (RMB200 million). The two parties are expected to facilitate about RMB10 billion in consumer credit loans over a term of three years beginning in 2019.
Xinming Zhou, Chief Executive Officer of Hexindai, commented, "We are excited to begin cooperating with Phoenix Finance's P2P platform. Together, we will work closely on expanding our consumer credit loan business and enhancing our big data-driven risk management systems to create enormous synergies.
"Going forward, we will continue to develop strategic relationships with respected institutions to seek operating synergies, diversify our user acquisition channels and funding sources, reduce funding cost, and further strengthen our risk management as we work to increase confidence in our platform and better serve customers."
According to the company website, Hexindai is a fast-growing consumer lending marketplace, facilitating loans to meet the increasing consumption demand of the emerging middle class in China. Hexindai provides borrowers with convenient and ready access to credit through its online marketplace.
The Company offers borrowers a wide range of products designed based on customer segmentation data and tailored to the specific needs of the emerging middle class in China by matching them with investors seeking various types of investment products with appropriate risk levels and risk-adjusted returns.
Shares gained 22 cents, or 8.2%, to $2.92
