What’s new: Micro Connect, a fintech startup led by former Hong Kong Stock Exchange chief Charles Li, on Saturday started trial operation of a Macao-based, blockchain-enabled financial assets exchange which helps China’s micro and small businesses to raise funds from global investors.
Micro Connect (Macao) Financial Assets Exchange Co. Ltd. deals with trading of Daily Revenue Contract Certificates (DRCCs), a new asset class that entitles holders to receive daily revenue shares from the businesses they invest in, Micro Connect co-founder Zhang Gaobo told Caixin.
The issuance of DRCCs comes in three phases. The first is initial offering; the second is add-on offering; and the third is secondary offering, with trading occurring on every Friday during the trial operations, Zhang said.
Micro and small businesses, most of which are shop owners, can only issue DRCCs to funds affiliated with Micro Connect in the first phase before they are willing to enter the add-on and secondary offering phases, during which all the investors on the financial assets exchange can subscribe to DRCCs, according to Zhang.
What’s the background: The platform’s Chinese name translates literally as “drip irrigation connect,” inspired by a precise agriculture irrigation system funneling water directly to the roots of crops, Li said in December.
The idea of Micro Connect is to link international capital with small and micro enterprises, which have difficulties in accessing investment and financing.
As of the middle of March, Micro Connect has invested in nearly 2,800 stores across China, said Zhang, predicting that some 30,000 stores will make initial offerings of DRCCs on the exchange this year.
Contact reporter Ding Yi (yiding@caixin.com)
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