(Yicai Global) Aug. 4 -- Charles Li, former chief executive of Hong Kong Exchanges and Clearing, has launched Micro Connect, a new investment platform aimed at connecting global investors with small businesses in the Chinese mainland.

Despite the dynamism and large size of China’s small and micro business economy, it has not been able to secure any international investors, Li said at a press conference yesterday. Such businesses find it difficult to secure funding because they are small, have low risk tolerance as well as high default and mortality rates, he said.

But with the development of China’s digital economy, especially the internet and mobile payments, the economic activities of small and micro firms are becoming increasingly transparent. Institutional investors can now invest massively in such firms, share their risks and benefits and gain revenue share, he noted.

Micro Connect’s investment strategy, called SHARPE, refers to small in amount, huge in number, automated repayment mechanism, and equity-like revenue distribution rights to fund small and micro enterprises. 

Micro Connect will set up a new digital trading platform for a large number of small and micro enterprises to post messages, trade and secure funds via financing by providing them with liquidity and sustained price discovery.

Micro Connect is part of New Markets HK, jointly founded by Li and Zhang Gaobo, founding partner and CEO of OP Financial.

Li stepped down as HKEX CEO at the end of last December after 11 years of service and submitted the Micro Connect proposal as a member of the Chinese People’s Political Consultative Conference during this year’s Two Sessions, the annual meetings of China’s parliament and top political advisory body.

Editor: Peter Thomas