Glossary

This glossary contains explanations of certain technical terms in connection with the Group and its business. The terms and their meanings may not correspond to standard industry meanings or usage of these terms.

Glossary Explanations
allowance coverage ratio Equals allowance for loan loss as divided by the balance of impaired loans
attachment bond A type of surety bond used in legal proceedings whereby we guarantee the ability of a party to indemnify the counterparty against damages caused by a wrongful or false attachment by the first party
average balance Unless otherwise indicated, average balance means the average month end balance during a given period
average guarantee and consulting fee rate Equals guarantee and consulting fee income as divided by the average balance of guarantees
average interest and handling fee rate Equals interest and handling fee income as divided by the average balance of loans
bank financing guarantee A type of financing guarantee by which we guarantee a bank that we will repay the bank financing if the borrower we guarantee defaults
bond insurance A form of external credit enhancement that generally increases the credit rating of the bonds issued
branch network Includes the credit guarantee network, consisting of the credit guarantee subsidiaries, branch offices and sales outlets; and the micro and small loan network, consisting of the micro and small loan subsidiaries and sales outlets
CAGR Compound annual growth rate
contract bond A type of surety bond mainly used in the construction industry by which we guarantee a project owner that a general contractor will perform its obligations under a contract
default payment In respect of the credit guarantee business, payments the company made on default customer's behalf
default payment receivables In respect of the credit guarantee business, the balance of the payment that the company made on default customer's behalf not yet recovered
default rate Equals the default payment that the company paid on default customer's behalf as divided by the amount of guarantees released upon maturity or full repayment
entrusted loan A type of loan made from entrusted loan arrangements, in which the company deposit its own funds with an intermediary bank which will on-lend the funds to borrowers we select. Upon repayment of the principal and interest on the loan, the intermediary bank transfers such amount to the company
financing guarantee A type of guarantee service by which the company guarantee the lender that it will repay the debt if the borrower that the company guarantee defaults. The company further divide its financing guarantee services into bank financing guarantees and non-bank financing guarantees
guarantee insurance A type of guarantee the company provide to third-party guarantors to share their credit risks by indemnifying them if they repay the debt on behalf of default customers they guarantee
impaired loans Any loans the company classify as "substandard," "doubtful" or "loss" based on its loan classification policy
impaired loan ratio Equals the balance of impaired loans as divided by the balance of outstanding loans
loss ratio Equals impairment losses on default payment receivables as divided by the amount of guarantees released
loss/revenue ratio In respect of the company's credit guarantee business, equals impairment losses on default payment receivables divided by segment revenue from its credit guarantee business; in respect of the company's SME lending business, equals impairment losses on loans and advances to customers divided by segment revenue from its SME lending business
micro and small loan The company's loan product, primarily between RMB0.5 million and RMB3.0 million, which it provides to micro and small enterprises, individual entrepreneurs and individuals through its micro and small loan network
microenterprise(s) Microenterprise(s), as defined in the Notice on the Provisions for Classification Standards of Small and Medium-sized Enterprises promulgated by the National Bureau of Statistics, the Ministry of Finance, the Ministry of Industry and Information Technology and the NDRC in June 2011. For example, in respect of the retail business, a microenterprise refers to an entity with fewer than ten employees or annual revenue of less than RMB1.0 million
non-bank financing guarantee A type of financing guarantee by which the company guarantee a non-bank financial institution, such as a trust company or financial leasing company, or general investors, that the company will repay the debt if the borrower or issuer its guarantee defaults
non-financing guarantee A type of guarantee whereby the company act as guarantor to promise to pay one party, the obligee, a certain amount if the principal fails to meet certain obligations. The company further divide its existing non-financing guarantee products into contract bonds and attachment bonds
repurchase transaction A transaction by which a seller sells certain financial assets to investors under repurchase agreements and agrees to repurchase such assets at a pre-determined price within a specified period of time
SME(s) Small and medium-sized enterprise(s), as defined in the Notice on the Provisions for Classification Standards of Small and Medium-sized Enterprises. For example, in respect of the retail business, a small enterprise refers to an entity with ten or more employees and annual revenue of RMB1.0 million or more; and a medium-sized enterprise refers to an entity with 50 or more employees and annual revenue of RMB5 million or more
subrogation The substitution of one party over the rights, claims or remedies held by another party. For example, in the event that the borrower that the company guarantee defaults and the company repay the lender on the default customer's behalf, the company will become subrogated to the lender's claims against the borrower
VaR Value at risk