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Operator
Hello everyone and welcome to our fourth quarter and full year 2021 earnings conference call. The company results were issued via new services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IR section of our website at ir.fimbigroup.com. Mr. Feng Zhang, our Chief Executive Officer and Mr. Jia Yuan Xu, our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A session. during this call. We will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP. For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our early press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Finally, we post a slide presentation on our IR website, providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Feng Zhang. Please go ahead, sir. Thanks, Jimmy.
Feng Zhang
Hello, everyone, and thank you for joining our earnings call. We're happy to speak with you today following the completion of another challenging year on a strong note. 2021 was a complicated year given the fluctuating macro environment. but our strategic transition towards better quality borrowers positions us for success amid rapidly evolving market dynamics. By leveraging our in-house developed technologies and industry-leading digital capabilities throughout our business process, we continue to deliver consistent and robust growth over the past several quarters with stellar performance across multiple operating metrics. We achieved another set of record-breaking results in the fourth quarter to half of the year. As we effectively and vigorously execute our strategy, our fast-expanding global borrower base supported our strong transaction volume growth over the past several quarters. For 2021, our total transaction volume reached an all-time high at RMB $137 billion with a year-over-year increase of 111%, exceeding the upper end of our transaction volume guidance range of between IMB $130 billion and IMB $135 billion. We attribute our success in acquiring new borrowers primarily to our real-time application proactive monitoring technology, which gives us advanced insight into customers' borrowing habits. Generally speaking, ITA enables us to strategically make efficient and appropriate adjustments, increasing our target screening efficiency by 20% and operational efficiency by 25%. Furthermore, during the quarter, we surpassed the benchmark of 1 million newly acquired borrowers across the globe for the fourth consecutive quarter. We are also pleased to share that as of December 2021, we have successfully registered 189 software copyrights and filed 150 patents in fintech-related areas. Building on our core technology capabilities and execution strengths, we are confident that we will keep our growth momentum rolling into 2022. Now let me share our major achievements for the fourth quarter. Total transaction volume continued on its solid growth trajectory in the quarter, reaching IMB 39 billion, up to 81% year-over-year, and 2.4% sequentially. As of December 31, 2021, our total outstanding load balance increased to RMB 50 billion, representing an increase of 88% year-over-year and 12% sequentially. These results are a strong testament to our rock-solid technology, which underpins our core competencies in the challenging macro environment. As we continue to acquire better quality borrowers, our percentage of loans facilitated at or below are 24% increased to 78% in the fourth quarter from 59% in the previous quarter. Also, we further reduced our average borrowing cost by 1% quarter over quarter to 24.3%, reflecting our relentless efforts to pursue financial inclusion and align with regulatory directives. As we progressively shift to better quality borrowers, we continue to innovate our fraud detection and risk assessment models through enhancements in our artificial neural networks, which can be used to effectively predict future possible trends based on past data. Coupled with our prudent approach towards risk management and our advanced credit risk management model, Our credit risk performance has remained stable. Our 90-day-plus delinquency rate remained low at 1.26 percent compared with 1.56 percent in the same period of 2020. And the vintage delinquency rate for the fourth quarter is expected to be around 2.3 percent. While achieving strong growth in key operational metrics, we also progressively improved earnings quality and our overall funding structure. As we continue to augment and optimize our mix of funding partners, funding sources on our platform become increasingly diversified while remaining stable and ample. Historically, liquidity from financial institutions in the fourth calendar quarter is weak and typically imposes funding constraints. However, during the fourth quarter of 2021, we achieved quarter-over-quarter transaction volume growth. validating the strong relationships and firm foundation of trust we have established with our institutional funding partners. We have cumulatively cooperated with over 60 financial institutions in different regions and have a robust pipeline in place. Furthermore, we continue to fortify our relationships with institutional partners, reflected by higher transaction volume in our capitalized model, which contributes 18% of total transaction volume in the product. In addition to our consumer finance business, our operations aimed at empowering small business owners also maintain their steady growth momentum. We continue to strategically expand our offline sales team, which now boasts over 1,000 employees and is well-placed to further complement our customer acquisition strategy. During the quarter, the number of small business owners will swell to 507,000. representing an increase of 161% from the same period last year, while the segment's transaction volume increased to RMB 8.6 billion, contributing 22% of total transaction volume for the period. In 2021, we empowered 826,000 small business owners across multiple sectors, such as retail, wholesale, food, beverages, and small manufacturers, and facilitated RMB 27 billion of small business loans, representing 20% of total transaction volume. Serving small business financing needs is strongly aligned with the government's objective to promote quality financing access for SMEs, especially in the aftermath of the global pandemic. Our corporate strategy for supporting the backbones of China's economy and injecting new vitality into small business is another testament to Finvolution's commitment as a responsible corporate citizen. Moving on to our international expansion, despite the resurgence of COVID-19 in Southeast Asia, we achieved transaction volume of RMB 3.7 billion in international markets in 2021, representing an increase of 270% year-over-year. International new borrowers in 2021 accounted for 32% of our total new borrowers, further demonstrating that our suite of technologies spanning from customer acquisition to loan collection can be seamlessly duplicated into new geographic markets. Additionally, we continue to deepen our partnership with Bank Jungle and actively explore potential partnerships with other players across different countries. It is worth noting that as we strategically shift towards better quality borrowers, we have significantly increased the proportion of installment loans in our international business operations. Meanwhile, we remain focused on improving our risk metrics and rolling out more innovative products and services to enhance our offering mix. Also, we redoubled our efforts to develop additional corporations with renowned partners, further broadening our presence in the region. We have great confidence that we will emerge as one of the leading players in the region. In summary, our startup performance in 2021 laid a solid foundation for us to drive sustainable quality growth in the long run. As we enter into 2022, we remain dedicated to refining our risk assessment and management framework with prudent principles and advanced technologies. optimizing our product mix towards ongoing risk metrics improvement and acquiring better quality customers. Our outstanding risk management system and strong overall execution will enable us to further strengthen our leadership position in the industry. We believe that we are well positioned to capitalize on the tremendous market opportunities ahead of us for years to come and remain committed to returning greater value to our customers, shareholders, and all stakeholders with better business scale and quality. Last but not least, I'd like to provide an update on our ESG performance, which we believe drives growth and leads to long-term value creation. We are proud to have received a low-risk ESG rating from System Analytics, a leading independent global provider in ESG research, ratings, and data. System analytics assessed our strong performance across a broad range of ESG metrics and rated us as low risk, commanding our relentless commitment to the robust management of all material ESG risks and opportunities across our business. We're firmly convinced that our long-term strategic plan, including financial as well as environmental, social, and governance goals, will guide Finvolution to new heights. As we encourage all of our people to take part in this critical plan, our efforts are organized on our mission of leveraging innovative technology to make financial services better. With that, I will now turn the call over to Jiayuan Xu, who will discuss our financial results for the quarter.
Bank Jungle
Thank you, Hong, and hello, everyone. Welcome to our fourth quarter and the full year 2020 with earnings call. In the interest of time, I will not go through all of the financial items on this call. Please refer to our earnings release for further details. As Fung mentioned, we are delighted to report that we closed 2021 on a strong note along with another quarter of reported profitability. Our accomplishments for 2021 were highlighted by transaction volume growth in seven consecutive quarters. and diversification of funding sources, as well as a substantial increase of 4.4 million borrowers, reflecting our capabilities to continually gain market share, both domestically and internationally. Driven by our ongoing efforts to optimize our operations, reverse execution of our overall strategy and skillful deployment of our technological capabilities across business. Our net revenues for the fourth quarter goes to RMB 2.4 billion, up 32% year-over-year. We also delivered a healthy non-GAAP operating profit of RMB 560 million and maintained a solid balance sheet with RMB 10.7 billion in total shareholders' equity. During this quarter, our average borrowing cost reached 24.3% compared with 25.3% in the third quarter of 2021 and 26.4% a year ago. We are certain that we have the capability and we are on track to facilitate all of our loans to be at or below 24%. Despite the rising contribution from our capital light model and the regulatory cap on borrowing rates, we have successfully maintained the overall take rate at around 4%, compared with 4.2% in Q3. Given our partner support and our ongoing efforts to enhance operational efficiency, we are confident that the borrowing caps impact Our financials will be minimal. Well, our capital light model proportion has grown throughout the year from 2.3% in the first quarter to 18% in the fourth quarter. Our leverage ratio, which is defined as risk-bearing loan balance divided by the shareholder's equity, remains stable at four times. We generated cash flow of RMB 1.2 billion for operations in Q4, up 12% from the same period last year. Notably, we further increased our unrestricted cash and short-term liquidity position to RMB 5.6 billion in the quarter, compared with RMB 5.1 billion in Q3. and RMB 4.6 billion in the same period last year. Attachment to the robustness of our balance sheet. During the fourth quarter, we continued to target high-quality borrowers with attractive borrowing rates as part of ongoing requirements to our customer acquisition strategy. Our customer acquisition channels remained diversified across online and offline sources. Ranging from online information feeds, internet search engines, and mobile app stores, to customer referrals and our strong offline director sales team, supporting a healthy and stable customer acquisition cost. More excitingly, we are able to continue to return value to our shareholders through dividend payouts and share buybacks. Between December 2021 and March 10, 2022, we deployed about USD 8 million to buy back our shares in the public market. As of March 10, 2022, we have cumulatively deployed USD 139 million for our buyback programs. Our board has also declared a dividend for our shareholders of USD 0.205 per ADS with a payout ratio around 15% of net income of tax for fiscal year 2021. This is our fourth consecutive annual dividend declaration, which reaffirms our confidence in our core capabilities, business growth, and long-term market potential. The company's average dividend payout ratio historical trend for fiscal year 2018 to 2021 was about 15% of the company's net income after in the same period. Between 2018 and 2021, we cumulatively deployed about around USD 202 million for dividend distributions. Going forward, the company's Board of Directors has approved an annual cash dividend policy under which the company will declare and distribute a recurring cash dividend at an amount of no less than 10% of the company's net income of tax in the previous fiscal year. Since we began our share buyback and dividend initiatives in 2018, We have cumulatively returned around USD 341 million to our shareholders. Before I conclude my remarks, let me give you some color on our business outlook for 2022. Despite the recurring COVID-19 outbreaks and the challenging microenvironment, our business continues to grow and gather momentum as we focus our efforts on strengthening our international initiatives, increasing facilitation for small business owners, and reinforcing our successful transaction to higher quality borrowers. As a result, we now expect our 2022 transaction volume to be in the range of RMB $175 billion to RMB $180 billion, representing an increase of 27% to 31% year-over-year. We are thrilled to top off 2021 with multiple accomplishments and look forward to continuing success in 2022. With that, I will conclude my prepared remarks. We will now open the call to questions. Operator, please continue.
Fung
We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to the management in Chinese, we ask that you please kindly repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Yada Li with CSCC. Please go ahead.
Yada Li
Hello, everyone. First of all, thank you for giving me the opportunity to ask this question. I'm Li Yada from the central company. Today, I have two small questions to ask the company. The first question is to ask about the progress of our international business. What will be the main products in the future? How much will the international business reach this year's end in terms of financing and income? And I also want to ask about the business in Southeast Asia. Is there any potential monitoring risk at present? The second question is also compared to before. When the price of our product drops below 24%, then our target customer group has also changed to a certain extent. What kind of adjustments will we make in the future? Okay, then I'll do the translation. The first one is regarding our international business. Could you please elaborate more about our future product matrix and how much an international business will contribute to our revenue and the transaction volume at the end of 2022? And the second one is compared with what we've been doing before. What is the, when the pricing going downward, how are we shifting our customer acquisition strategy? Thanks.
Bank Jungle
Adam, let me answer your first question about our international business. Last year, our international business achieved very significant progress in all aspects. In 2021, our annual turnover reached 3.7 billion yuan. In the previous year, it increased by 2.7 percent. The net worth is 4.8 billion yuan. In the previous year, it has also increased by more than double. In the year-round, there are also 1.4 million new customers. Compared to the previous year, there is also a 120% increase. At the same time, we are working with local partners. In fact, we have also received very good recognition. We actually started a strategic cooperation with the local bank structure. In the first issue, we have already obtained
Operator
Let me translate for my CFO. First of all, we have made tremendous progress for our international business in 2021. Our transaction volume for the year reached RMB 3.7 billion, an increase of 270% year-over-year, and looking forward, we are confident to increase our international loan balance. And for 2021, we acquired 1.4 million new international borrowers, representing a year-over-year increase of 122%. Our local partners have also recognized our capabilities and we, for example, we have cooperated with local players such as Bankjago. In the Stage 1 of our cooperation, we have reached an agreement of USD7 million as our credit facility.
Bank Jungle
At the same time as we achieved significant growth last year, we are also thinking about how to do international business in the future and how to set our strategy. In the second half of last year, we actually reached a consensus. We feel that we are pursuing a long-term healthy growth in Southeast Asian international business. This is our most important strategic goal. Combined with domestic experience, In 2021, we have achieved strong loan volume growth for our international business.
Operator
At the same time, we're also thinking how we should move the business going forward. And based on our China experience of transiting to better quality borrowers, we would think that our priority for the international business would be on a transition to better quality borrowers as well, in order to scale our international business to greater heights on a higher strategy level.
Bank Jungle
So from our own planning this year, So this is a very important strategy for us this year. And then from the scale, we also have a rough forecast this year. But the premise is that we still have to run this business to a higher quality as the first condition. We expect that we will have a balance in Southeast Asia in the fourth quarter of last year, which is about 50 million US dollars, 3.3 billion yuan.
Operator
在这个基础上,我们希望今年能够在贷款上能够增加一倍左右。 Okay, our focus for international business would be to shift to higher quality borrowers and also increase the proportion of loans facilitated for them. For example, in the Q4 of 2020, this proportion was about 30% and we expect it to increase to 70% by the end of 2022. And some of the traits of these higher-quality borrowers would include a higher ticket size and longer loan tenure. And for the outstanding loan balance in the fourth quarter, it was around $15 million USD, which is around $330 million RMB. And we are confident to increase it by 100% by the end of 2022. This is a question about our answer.
Bank Jungle
Then the second question is, after we go down in pricing, what is our strategy in terms of goods? First of all, we can see that we have had four consecutive seasons. The number of new customers in China has reached more than 1 million. From this result, in fact, we can see that our current goods strategy should be said to be very effective and successful. Then our main The source of the goods includes information flow, search engine, application market, customer recommendation, and offline channels. Among them, the ratio is relatively large, up to more than 60%, which is our information flow. We have been running this channel for many years. In terms of results, in fact, the effect is very good. We can also have confidence in the actual situation of this business, and we can create a higher and better group of people.
Operator
our numbers of new borrowers have exceeded 1 million in four consecutive quarters. Based on the current results, our customer acquisition strategy has proved to be effective and efficient. And we have more than 20 different customer acquisition channels, namely TikTok, Tencent, etc. And we can see that the information feed is one of the more effective channels for us. And going forward, we are confident to acquire better quality customers from this information-based China.
Bank Jungle
然后同时我们也在积极地 突然我们自己的线下地推渠道 我们在四季度这个offline的渠道 我们的人数已经从700人增加到近1000人 然后覆盖的城市内达到了20个城市以上 那我们从线下的这个渠道其实也 Okay, at the same time of acquiring our customers online, we are also strengthening our offline direct sales team. For example, we have increased
Operator
our employees for offline direct sales team from 700 to 1,000 employees in the fourth quarter. And these employees cover about 20 different cities, and we acquire about 10% of our customers from these offline China.
Bank Jungle
In addition to this channel, we are also actively doing various strategies, model-based reception and optimization. For example, our media with information flow, In conjunction, we are also doing a model of all-value return to base pricing, which is a strategy that takes a price split for different customers. After doing this model, it can significantly improve our estimated accuracy of different restricted groups. It can achieve a more precise price split, improve the treatment of the people, and at the same time increase the efficiency of the customer. This is actually very helpful for us to further optimize the cost of the customer. We will continue to do these works. It is also a very important direction for us in terms of customers.
Operator
We have been constantly upgrading our risk models and customer acquisition models and principles regarding these acquisition strategies. For example, there has been feedback. We are consolidating feedback from these information feeds channels. Also, we are adopting a segment bidding strategy for different customer categories. This segment bidding strategy will help us to increase our customer acquisition efficiency and further refine our customer acquisition costs. This is something that we will be doing constantly for the mid to long term.
Fung
Our next question comes from Frank Jiang with Credit Suisse. Please go ahead.
Frank Jiang
感谢管理层给我提问的机会。 我是Credit Suisse的郑豪。 第一个问题是关于22年交易量的指引。 我们发现指引相较21年仍然有大概30%左右的增长。 可否请管理层提供一些比较可观的增长背后的一些驱动性因素? This is Frank from Quidditch Swiss. Thanks, management, for giving me the opportunity to ask questions. I have two questions. The first one is regarding the long-volume guidance for 2022. The guidance indicates robust growth of around 30% year-over-year. Could management share a bit more color on what are the drivers behind this growth in view of the COVID resurgence and micro-slowdown, et cetera? And the second question is, could management provide some color on potential new license acquisition, for example, national micro-landing license, any kind of preparation work done on that front? Thank you very much.
Bank Jungle
But from our business perspective, most of the things have little impact on us. There may be a few things that are more influential. One is the epidemic. The epidemic has been going on in China for two years. From the impact of these two years, the risk performance and the dealings Actually, the impact is good. It belongs to the general control. But now, indeed, the pressure of the entire consumption is relatively large. GDP growth is also very depressed. Last year, the 4G rate increased by 4%. This year, we set a 5.5% target. I believe that there will be a lot of people who need to improve consumption. Here, I think we have also seen some opportunities. If consumption can be encouraged in the future, The macro environment in China is complicated.
Operator
But if you actually observe, the impact on our operation is minimal. The more relevant factors affecting our operations would be COVID, which affects our loan volume and also our risk metrics. But these challenges remain manageable. And from the country's perspective, The GDP growth in Q4 was only 4%. While the overall economy is under pressure, both the central and local governments encourage consumption to drive the economy. And this provides tremendous opportunities for us in the future. 第二个角度我们会从结构上来看。
Bank Jungle
From last year, we can see that there are a lot of giant companies and there are a lot of very obvious limitations. We predict that the future of this industry will be more balanced and more scattered. This will also give other market participants a greater space. The third is from the point of view of supervision. We have been in this industry for almost five years, from 2018 to now. The requirements are very clear. In the process, it has increased the cost of corporate income. We think this is very effective for the entire market, because the market is becoming more and more transparent. For some companies that don't have the core competitiveness, we have also eliminated them. I believe that the rest are not many, they are all high-quality, competitive companies. For the entire market share, we also have a greater space for development.
Operator
Okay, let me translate. The second point is that we can view it from a structural perspective. For example, the restrictions on the internet giant in the consumer credit market is much more obvious. In the future, we think the structure is likely to be more diversified and eventually reaching a more balanced stage, providing more opportunities for mid-size platforms. And the third point can be from the regulator perspective. The fintech industry has been under regulatory focus since 2018, and during the past five years, regulators have issued multiple documents to regulate the industry and ensure compliance. These measures place a positive role in consumer protection and in and increase the cost of compliance for some enterprises. As the industry becomes more regulated, weaker companies will be eliminated, and the remaining companies, especially for those within competitive age, will experience better development in the future.
Bank Jungle
Lastly, the monetary policy is generally lax.
Operator
and there is also a potential of increase amidst a, and coupled with a stable credit environment, it is unlikely to have a huge fluctuation, and hence, we are confident of the potential of the consumer finance market in the future, which give us the confidence to give us a loan origination guidance of between 27% to 31%. The second question is about the development of the pipeline.
Bank Jungle
This is also a concern for everyone. In fact, we mainly take pictures around the small band. We already have a small band in Anhui. So for us, I think it's from two perspectives. The first is that if we increase the number to 51, then it should be to gain national financial support. In the market, we can see that there are a lot of同行 who have already done this kind of investment in small business. The other one is where to choose the business. From our point of view, we want to maintain a certain flexibility. One of our choices is to increase the investment to 5 billion yuan on Huibao small business.
Operator
I believe you guys know that we already have a micro-landing license in Anhui. First of all, we can choose to increase the registered capital to $5 billion and achieve a nationwide license like what many of our peers are doing. And also, we can look to explore and acquire other micro-landing licenses in other parts of the country. in order to have more flexibility when conducting our business operations. Regardless of the routes that are available to us, we are confident to achieve a nationwide micro-landing license for our operations.
Fung
The next question comes from Hanyang Wang with AT6 Research. Please go ahead.
Hanyang Wang
Thank you for accepting my question. I have two questions. The first question is also about our guidance this year, that is, whether it can be disassembled, how much will come from this new customer, how much will come from existing customers and old customers. Thanks management for taking my questions. So my first question is regarding our guidance. So can management help us break down the proportion of the loan taxation amount that comes from the new users, existing and retained users? So what's our overall retention rate in China and international market in Q4? Second question is, given the current market condition, will we continue to pay our dividends? And will we accept the current share repurchase and initiate a new share buyback plan? So any plan for the Hong Kong primary listing? Thank you.
Bank Jungle
Hi, my name is Zhang Haiyang. The first question is about our analysis of GANES. I think our overall business is in a relatively mature stage. From our past data, we have about 20% to 20% of new customers and 80% of old customers. I think in the future, It is very likely that I want such a gap. It is such a structure. Of course, this is not excluded. There will be some changes in the stages. Because you know, when we do business, in fact, our many reactions and adjustments are very concise. When the market is good, we may do more in new customers. When the risk is suppressed, we may be able to control the rhythm of new customers. So this is for our business, Okay, let me translate.
Operator
As you know, Han Yang, our business has been in a very stable state with about 80% of our customers are repeat borrowers and 20% are new borrowers. This is likely going to be the trend with fluctuation adjustment needed whenever we need to adjust our operations. For example, we will tend to acquire more new customers when the market is good and we will tend to focus more on repeat borrowers when the cut when the market is facing some challenges. And on a stickiness level, we believe it will be about the same as before going forward.
Bank Jungle
We have been doing this from the perspective of returning the shares. Since the listing of the shares in the end of 2017, the share price has been the fourth time this year. The total amount has been more than US$200 million. We have been doing the buyback, especially when the stock price has been underestimated. In 2018, the total amount of buyback has been US$140 million. And then we also revealed that from the end of last year to March 10th, we also repaid $8 million. So with these two dollars added up, our total amount has reached $3.4 billion. And then from the return plan, we still have a plan that is currently in effect. It should be by the end of this year, at the end of this year. Okay, let me do the translation. We have been consistently returning value to our shareholders since 2018.
Operator
This is our fourth consecutive annual bid. And we have cumulatively returned about $200 million USD to our shareholders. And in terms of buyback, since 2018 until now, we have cumulatively buyback deployed about USD $140 million to repurchase our stock. And for the period of December to March 10, we have deployed about $8 million USD to repurchase our stock. In total, share repurchase and our dividend policy, we have cumulatively deployed around $341 million. And regarding our repurchase plan, we still have an existing repurchase plan until the end of the year. And currently, there are still about $30 million USD of unutilized amount.
Bank Jungle
Oh, Haiyang, .
Hanyang Wang
That's very helpful. Thank you.
Thomas Chong
Thank you.
Fung
Our next question comes from Alex Yeh with UBS. Please go ahead.
Alex Yeh
Good morning, Mr. Guan. I have two questions. The first one is about the interest rate and the rate. I would like to ask about the average interest rate of Q4. How much is it now? How far is it from our goal? According to the revenue click rate, it is 4% of Q4. After that, it will continue to increase. How much is expected to fall? In the next quarter, it may reach a stable state. The second question is about asset quality. I see that some of the Q4 indicators have a slight up or down effect. What are the reasons for this? And can you share with us some of the cases of Day 1 delinquency in the recent Q1? We expect that the situation of asset quality in the future... So I will translate for myself. First question is about your interest rate and rate outlook. So what is the average interest rate pricing for Q4 and how far are we versus our target pricing? And how much downside do we still expect on our revenue take rate? The second question is on asset quality. You notice there is a slight update on your asset quality indicators in Q4. So I'm wondering what are the underlying reasons behind and could you also give us some color in terms of your latest day one delinquency ratio in Q1? And also, when do you expect your asset quality to pick out and improve going forward? Thank you.
Bank Jungle
Okay, Alex. Let me answer the question about interest rates and take rates first. Our Q4, our average price has dropped to 24.3. And then, we have more than 80% of the trades at level 24 or above. So we should be very confident to say that we are fully prepared for the price impact of 24. For the future, we had a guidance before, that is, we expect that the average price will be around 23 in the second half of this year. But I would like to explain that we will not be very aggressive in terms of pricing because we have already made such preparations. We will adjust the market situation and our own business rhythm to maintain a sufficient flexibility. So this year's overall average pricing should be about the same as between 2023 and 2024.
Operator
Hi Alex, let me do the translation. In the fourth quarter, our average borrowing rate was around 24.3%. And by the way, 80% of our loans are facilitated at or below 24%. And thus, you can see that we are actually very confident to achieve the target of 24%. However, I would like to highlight that we will maintain a certain degree of flexibility going forward. And thus, our average pricing for the remaining of the year will be in the range of 23% to 24% going forward.
Bank Jungle
Then from take rate, I think it is influenced by several factors. One is the price I just introduced. In addition, it is closely related to the deadline and capital and risk performance. In fact, you can see that in terms of the deadline, The Q3 average is about 8.2 months, and the quarter is about 8.9 months. The rise in the deadline is actually a positive impact on TechWare. At the same time, we still maintain the risk level of 2.3% in Vintage口径. So, from my point of view, it's a good thing. At the same time, from the perspective of capital cost, We think that this year, the probability is relatively wide, especially in the first half of this year. The capital is relatively wide, so the capital cost will definitely have a space for decline. But how much is the decline? This is still uncertain. So after considering these factors, we think that if the price drops to 13, our take rate should remain at about 3.6. But if the risk is on the capital cost, I wish you what sort of go home on it. I may want to you couldn't take a ticket away. You just can't go easy.
Operator
And that's let me do a translation for you. The takeaway is impact by several factors such as pricing, loan tenure, risk, and funding costs. Okay, for example, our loan tenure in the fourth quarter has increased from increased from 8.2 months in the third quarter to 8.9 months in the fourth quarter, and this has resulted in a positive take rate. And our vintage risk delinquency is expected to be around 2.3%. And funding costs, in the first half of 2022, we expect there is larger liquidity with room for improving our funding costs. And let's assume that if our average pricing drops to 23%, We are able to maintain our take rate at 3.6% with room for further improvement when funding cost and risk metrics improve.
Bank Jungle
The second question is about asset management. In fact, I mentioned this in the last course. At that time, we had already found that some of the early risk indicators were under some pressure. So, our risk management team We immediately made the appropriate adjustments. As you all know, we have been doing business for more than ten years now. In fact, we have a very rich experience in this regard. So now, from this data point of view, some of our decisions at that time were very effective and had a very good effect. If we look at the risk of Day One, we were about 5.6% in October. The latest data shows that it has dropped to 5.3%. This is actually a very low level in our history. In addition, the return rate of 1 to 30 days has returned to more than 90% in March. So we should say that the overall level of risk has been very well controlled after we have adopted this relevant strategy and adjustment. Alex, let me do the translation for you now.
Operator
In our previous quarter earnings course, we have mentioned that we have observed there is some uptick in our risk delinquencies. And our risk department has also made some timely adjustment to our risk assessment policies. For example, we have seen The day one delinquency metrics in October was around 5.6%, and now it is at 5.3%. This proves that our risk model is actually working. And also, for our day 1 to 30 loan collection rate, we have maintained it at above 90%. And going forward, we are confident to maintain our vintage delinquency at around 2.3%. Okay, Alex, let's look at the HR question.
Fung
Our next question comes from Thomas Chong with Jefferies. Please go ahead.
Thomas Chong
Good morning. Thank you very much for accepting my question. My question is mainly about overseas. I remember you mentioned that overseas, Buy Now, Pay Later is a great opportunity. I would like to ask if we can share future strategies in this regard. In addition, from the perspective of competition, We see that Shopee and Grab are developing their business. I would like to ask how we see the competitive landscape. Then, in terms of overseas, can you share which Southeast Asian countries are our main focus? My last question is about our full-year guidance. Can you talk about our full-year guidance? Thanks management for taking my questions. I have a question regarding the overseas business. Given Buy Now, Pay Later is very popular these days, I just want to get a sense about our strategies in coming years and how we should think about the competitive landscape because we are seeing overseas players also aggressively investing in these areas, and which countries are we focusing or allocating more resources on? And my second question is about the full year guidance. Can management break out about the growth rate in domestic market and the growth rate in overseas? Thank you.
Feng Zhang
I'll take the first question and leave the second for Alex. Yes, I think for the overseas market, the BNPL business, I think overall we are exploring, but we take a cautious view. So we do see that it is a pretty hot area and trend in some of the market. The valuation in the market is also pretty high. But on the other side, we also feel the competition and also the valuation in some of the market is a little bit overheated. On that regard, we are a little bit cautious. So we are exploring some opportunities in some markets, including Indonesia and Vietnam. We have striked some partnerships with some local partners, but we have been taking one step at a time. And at this point, we do not have... you know, very high or very concrete, you know, target for this particular business. I think we are kind of like just testing the water and staying optimistic on this. And with regard to, you know, which country, I think the biggest market that we see that has the best balance for market goals, regulatory environment, and market readiness, as well as size, is Indonesia, which is also where we have the biggest business size and we are most optimistic about. We are also pretty optimistic about the Philippines and Vietnam as well, you know, in which countries we have presence already. At the same time, we are also exploring opportunities in other Southeast Asian countries as well as a few South American countries.
Bank Jungle
The second question is about our domestic and overseas guidance. Actually, I mentioned it earlier. Our overall trading volume overseas is still very low. Last year, overseas trading volume was 3.7 billion yuan, which is not very high overall. So, the main growth in this year's guidance is that the domestic contribution is greater. In terms of overseas, I think the most important thing is to achieve our strategic goals in the community. Our loan volume for 2021 in the international market was around $3.7 billion. If you compare to our domestic market, this percentage is actually not very high.
Operator
And also, our priority for this year, 2022, for our international markets would be the transition to better quality borrowers. We have also mentioned that our outstanding loan balance for our international market was around $50 million USD in 2021, and we expect it to grow by 100% this year by the end of 2022. Thomas, do you have any other questions?
Fung
As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.
Operator
Thank you once again for joining us today. If you have further questions, please feel free to contact Simplolution Investor Relations team.
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