A more mature case is that of Alibaba, where all individual businesses that open online stores on Taobao or Tmall, the customer-oriented marketplaces, are eligible to become beneficiaries, said Ge Ruichao, public relations head of Alibaba's small-loan business unit.

These small and medium-sized enterprises, with annual sales of 30 million yuan or less, can borrow up to 1 million yuan, Ge said.

According to Ge, the problem lies in the asymmetrical information between commercial banks and small-cap firms.

"Since many companies fail to reach the threshold for obtaining direct loans from banks, they have already turned to these intermediaries. But as the majority are non-registered agencies, we do want to lend a helping hand via a legal framework," he said.

Alibaba's role involves investigating a wide range of companies, identifying their needs and then assisting them in applying for the best financing option.

Ge has found that 70 percent of SMEs usually need to borrow 300,000 yuan or less, for three months at most.

Alibaba found itself best-positioned to cater to such clients thanks to the data it collects from merchants.

"We are able to monitor the credit history and business performance through their track record on our platform, so that we may secure funds for the best possible candidates," he said.

Alibaba lends at a rate of 0.05 percent on a daily basis, which translates into an annual rate of 18 to 20 percent.

An "early warning" system for potential defaults operates by monitoring monthly sales for a change of 30 percent or more, Ge noted.

"We might freeze some of the capital until the merchant can explain the situation. We judge if they are able to make repayments on time," he said.

All these moves have unnerved many banking insiders. Hong Qi, head of China Minsheng Bank Corp, which is known for lending to SMEs, has identified Alibaba as its biggest competitor.

Alibaba's finance operations use "big data" based on clients' transaction activities, Hong told the National Business Daily.

"It analyzes clients' behavior and characteristics and offers responsive financial services. This is a completely new trend that may overturn traditional business models entirely," he said.

Chen Lili in Shanghai contributed to this story.