Tencent establishes China's first online bank to boost small businesses

Tencent, one of the premier internet companies in China, has reportedly opened the country's first private online bank today.

The company has named the financial institution, "WeBank" after its popular messaging app, WeChat. The bank is China's first to be based on the Internet, reported Tech Crunch.

Tencent and rival Alibaba were amid ten private investors that received a nod from the Chinese government last year to launch five private banks. The pilot program is aimed at making credit more easily available to small businesses, which often face disadvantage when it comes to availing loans from state-owned banks despite being integral to China's economic development.

While speaking at WeBank's launch ceremony in Shenzhen, China premier Li Keqiang said that the program aims at lowering costs for and delivering practical benefits to small businesses, while forcing traditional financial institutions to accelerate reforms.

The report said that WeBank's first loan, amounting to about 5,600 dollars, was availed by a truck driver.

The financial sector is a relatively new battleground for rivals Alibaba and Tencent which already compete each other in e-commerce, messaging, and big data.