Liu Yonghao, co-founder of China’s first privately owned bank Mingsheng Bank, is planning a new internet finance venture as he has found the traditional banking sector cannot be relied upon to support entrepreneurial businesses. Stating that traditional banks and financial institutions serve the state-owned sector and the government and they lacked the objective of providing funding for private enterprises, he maintained that the banking sector is not fit for the age we live in. Privately owned businesses now account for 60% of China’s economic output, he added. The problem is even more acute in rural areas, says Liu, who made his initial fortune in the agricultural sector. Farmers are not allowed to own land but instead lease it from the state, so cannot use it as collateral to secure bank loans. Liu has a net worth of $4.1 billion and is ranked number 28 in China on the Forbes Billionaires List from 2016.
