LexinFintech Rides Wave of Installment Finance Popularity, China's Rising Consumption

HONG KONG,July 12,2018 -- Broadening the reach of installment finance among China's young generation to tap latent demand will be the main strategic driver in the coming years for LexinFintech Holdings Ltd. ("Lexin") (Nasdaq:LX),its CEO Jay Wenjie Xiao,said at the RISE Conference in Hong Kong.

A leading online consumer finance platform for educated young adults in China,Lexin will expand the range of installment shopping activities for its customers through its e-commerce platform Fenqile. It's a strategy that harnesses the rapid increase in consumption in China,which has created huge demand for consumer credit.

Fenqile began as a platform selling computers,smartphones and other consumer electronics,and now its customers can purchase a wide range of products,from cosmetics and personal care to plane and train tickets,as China's young people increasingly use credit to improve their quality of life.

Mr. Xiao's remark came as China's retail sales,forecast to reach US$5.8 trillion in 2018,are poised to overtake those of the US this year,making China the world's largest consumer market,according to Mizuho Bank. It's where Lexin plays a part,says Mr. Xiao. Just a decade ago,China's retail sales were a quarter that of the US.

"China is increasingly looking to make consumption the driving force of economic growth,in addition to the traditional engines of investment and export. Consumer finance providers can help with that as they stimulate domestic demand by helping consumers enhance their purchasing power and ability to pay," said Mr. Xiao.

In an industry-wide e-commerce shopping festival on June 18,for example,Fenqile saw its sales surge 220% compared to the same date last year,with the number of participants doubling from a year earlier.

Despite the rising consumption,China's consumer finance remains a largely untapped market. A substantial number of people have been underserved by traditional financial institutions which lack the relevant information to make credit assessments and offer financial products to address individuals' credit needs.

China's overall unsecured consumer loans accounted for only 9% of its GDP in 2016,compared with 15% in the US in the same period,according to market research firm Oliver Wyman.

To tap the underserved market,Mr. Xiao said Lexin will closely work with financial institutions to combine the advantages of both sides.

"Traditional institutions have tended to focus on mortgages and enterprise loans and therefore haven't made their way to consumer finance effectively. Fintech companies like Lexin have expertise in product operations and risk management using big data and AI,while financial institutions have licenses to provide financial services with abundant funding," he said. Lexin has more than 30 funding partners which are mainly financial institutions.

The use of installment finance will continue to rise over the next few years,and along with the expansion of consumer credit,the concept of making purchases on an installment basis is increasingly seen not just as a way to satisfy an urgent need,but also as a normal method of shopping,according to a January report published by Lexin,with support from its e-commerce partners including Apple,Dell,L'Oreal,and P&G.

The total number of registered users of Lexin reached 26.4 million as of March 31,2018,up 95% from a year earlier; and users with credit line grew 64% to reach 8.2 million over the same period.

About LexinFintech Holdings Ltd.

LexinFintech Holdings Ltd. ("Lexin" or the "Company") is a leading online consumer finance platform for educated young adults in China. As one of China's leading financial technology companies,Lexin integrates its e-commerce-driven online consumer finance platform,Fenqile,with advanced risk management technologies,the Company's Dingsheng asset distribution and fund matching technology platform,and the Company's Juzi Licai online investment platform for individual investors,to create a comprehensive consumer finance ecosystem. The Company utilizes technologies including big data,cloud computing and artificial intelligence to enable the near-instantaneous matching of user funding requests with offers from the Company's more than 30 funding partners,which include commercial banks,consumer finance companies,and other licensed financial institutions. By serving the credit needs of China's educated young adults,Lexin helps its more than 20 million registered users to enjoy a better quality of life through the use of better credit.

For more information,please visit: http://ir.lexinfintech.com.

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