Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Fintech»Hong Kong fintech start-up offers loans to unpaid subcontractors amid building slump
    Fintech

    Hong Kong fintech start-up offers loans to unpaid subcontractors amid building slump

    August 26, 20244 Mins Read


    A Hong Kong building subcontractor surnamed Chan, who was responsible for electrical and mechanical work in air-conditioning systems on a project at Hong Kong International Airport at the beginning of this year, waited several months for the project’s main contractor to pay him.

    Seeking relief from his liquidity problem, Chan even approached banks but was told that a loan would take months to approve, as lenders are now more cautious when it comes to construction projects.

    The sector is facing challenging times with a financing gap that continues to widen. Back-to-back payment arrangements, long waits for invoices to be paid, and time-consuming paper-based processes are locking up an estimated HK$53.8 billion (US$6.9 billion) in the construction supply chain each year and creating a need for accessible and efficient working capital, according to Riverchain, a Hong Kong-based fintech start-up that is trying to address that need.

    A construction subcontractor hired to handle a specific aspect of a larger construction project often needs to obtain a cash advance to cover the wages of its employees and materials bought for other projects in hand while waiting for payments to come through.

    “I waited more than six months, and final payments took even longer,” Chan said, declining to disclose the amount he was owed.

    The team at Riverchain, with CEO Ben Wong on the far right. Photo: Handout

    He tried to borrow money from friends and even used a property as collateral, but “the approval also took some time, which can’t ease cash flow issues”, he said.

    Chan said the problem has become more common since the city’s property market went into a downturn. “Developers have become more prudent so the number of private projects is less,” he said.

    In July, a labour dispute erupted at the construction site of Seasons Place at Lohas Park in Tseung Kwan O, jointly developed by the MTR Corp and Wheelock Properties, as nearly 100 workers had not been paid more than HK$6 million in wages, according to local media reports.

    Eventually, Chan turned to Riverchain, which provides online cash advances by using alternative industry data to determine if a borrower is suitable.

    He uploaded his project invoice and relevant documents and received around 90 per cent of his project’s funding amount, minus a one-off Riverchain fee, within 48 hours.

    “The construction sector has traditionally had a lack of access to financial products designed for the sector,” said Ben Wong, CEO of Riverchain. “We have designed a financing product that is a working capital relief where we are able to turn their accounts receivable into cash.”

    “We also noticed that the sector is largely behind when it comes to digitalisation and we want to make the supply chain a little bit more transparent and uniform,” he added.

    Riverchain’s digital platform features a risk model that capitalises on industry knowledge and the ability to unlock value from both unstructured and structured industry data, for example, construction site data, performance data and money flow data.

    A construction worker on a building site in Central, August 16, 2024. Photo: Sam Tsang

    The fintech firm will purchase the construction invoice and provide a cash advance of up to 90 per cent. “We will then wait for the full amount of the invoice to be paid out by the client and send [our customer] the balance of the payment minus our fees, which is below market average” Wong said.

    The start-up, which has been going for seven months, launched a HK$400 million fund to support the city’s subcontractors and construction suppliers.

    “The fund is going to help us accelerate [growth], as we do believe there are a lot of projects still in the pipeline … a combination of public and private projects,” Wong said.

    The company has provided financial support to more than 30 projects, including 11 Skies, The Henderson and Kai Tak Sports Park.

    “We believe that the construction sector is a core driver of economic growth in Hong Kong … so we’re going to continue supporting it, and we’re looking for specific opportunities in the construction sector where we can provide the working capital, but also identify a very good quality asset class to our investors,” Wong said.

    Despite the current property market slump, Riverchain sees a lot of good projects that can be supported and expects that by the end of this year it will have deployed capital of about HK$500 million, reaching HK$2 billion by the end of 2025.

    “We’re not just confining ourselves to Hong Kong. We hope to be able to tap into the Southeast Asian region in the next year, because the supply chain and construction [there] is similar in terms of needing to be able to adopt digital solutions, but also needing to address some of the working capital needs they have,” Wong said.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    Founders see Cyprus as springboard for global fintech expansion

    Fintech

    Fintech’s Role In U.S.–Africa Trade

    Fintech

    Africa Fintech Summit Accra 2025 Announces Strategic Partnership with the Ministry of Communication

    Fintech

    Sole Fintech plans to reach 100k investors – FBC News

    Fintech

    Auto lending fintech Lendbuzz files for IPO

    Fintech

    Anchorage’s Growing Role in Arctic Trade: What It Means for Digital Payments and Fintech: By Naina Rajgopalan

    Fintech
    Leave A Reply Cancel Reply

    Top Picks
    Commodities

    How Twisted Metal Season 2 Goes Supernatural with Calypso’s Magic, Sweet Tooth’s Flaming Head & More

    Fintech

    PayDunya, la pépite sénégalaise qui séduit la fintech sud-africaine Peach Payments

    Cryptocurrency

    Next Cryptocurrency to Explode, 27 May — Quant, Decred, Gala, Convex Finance

    Editors Picks

    Putin Greenlights Crypto Mining In Russia 2 Months After Trump Vowed To Mine All Remaining Bitcoins In US

    August 9, 2024

    Osisko Development uncovers 90.2 g/t gold and 226.33 g/t silver at Tintic project

    August 7, 2024

    Americas Gold and Silver Corporation Provides Q2-2024 Production Results; Galena Complex Silver Production the Highest Per Quarter in Over 10 Years | News

    July 17, 2024

    China Will Be Russia’s Biggest Gas Customer As Flows to Europe Dwindle

    October 21, 2024
    What's Hot

    FDIC Rule Would Protect Bank-FinTech Model

    October 23, 2024

    Currency derivatives open interest rises as rupee volatility spurs hedging

    February 24, 2025

    The Ultimate Cryptocurrency to Buy With $1,000 in August

    August 26, 2024
    Our Picks

    Types of Digital Wallets Explained

    May 19, 2025

    The Future of Finance: Best Cryptocurrencies to Consider

    July 27, 2024

    XAG/USD struggles to hold $38 as US-EU trade pact improves market mood

    July 27, 2025
    Weekly Top

    Founders see Cyprus as springboard for global fintech expansion

    September 14, 2025

    Delhi truck driver claims robbery of 6,000 kg copper scrap after being sedated, probe reveals he was part of plot | Delhi News

    September 14, 2025

    10 terrible early 00s movies with killer nu metal soundtracks

    September 14, 2025
    Editor's Pick

    The 50 Hottest Fintech Startups

    February 13, 2024

    Ryan Serhant Explains How ‘Owning Manhattan’ Is More About Real Estate and Less About Catfights

    August 7, 2024

    Is rental property a good investment?

    February 9, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.