CNFinance is a Chinese home equity loan facilitator that connects small and micro-enterprise (SME) owners — primarily in Tier 1 and Tier 2 cities — with trust companies and commercial banks that fund and formally issue the loans. The core borrowers are SME owners who need working capital secured against residential or commercial property, a segment that large state-owned banks are structurally ill-suited to serve due to rigid credit processes and their general unwillingness to extend second-lien mortgage products. CNFinance fills this gap by facilitating first- and second-lien home equity loans with flexible requirements, loan sizes from RMB100K to RMB5M, and terms typically around 10-12 months. Under the primary trust lending model, CNFinance acts as both service provider and co-investor: it subscribes to subordinated units in trust plans alongside senior external investors, earns a performance-based service fee of up to 8% per annum, and retains residual spread income. This makes CNFinance a leveraged credit business — it earns a spread on a portfolio it partially funds, and absorbs first losses when loans sour. Over 95% of borrowers are sourced through a network of contracted sales partners, who are required to post a credit risk deposit of 5%-25% of loan principal, partially sharing credit losses on defaults. CNFinance is currently in a deliberate contraction phase, prioritizing NPL reduction over new originations, with management focused on stabilizing the balance sheet before resuming growth.