SecProbe.io

Mail Stop 4720

February 18 , 2016

Via E -mail
Dr. Zane Wang
Chief Executive Officer and Executive Director
China Rapid Finance Limited
5th Floor, Building D, BenQ Plaza
207 Songhong Road
Changning District, Shanghai 200335
People’s Republic of China

Re: China Rapid Finance Limited
Amendment No . 3 to
Draft Registration Statement on Form F -1
Submitted December 28 , 2015
  CIK No. 0001346610

Dear Dr. Wang :

We have reviewed your amended draft registration statement and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.

Please respond to this letter by providing the  requested information and either submitting
an amended draft registration statement or  publicly  filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in re sponse to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.

General

1. We note that the CBRC published a draft rule on December 28, 2015 that would place
additional restrictions on peer -to-peer lenders, including the prohibition of taking
deposits from the public, pooling investors’ money or guaranteeing returns.  Please
update your disclosure to include a discussion of this new draft rule and how it may affect
your business or ex plain to us why such information is not material to investors.

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 2

2. We note your response to comment 2.  However, it remains unclear whether you have
protocols to ensure that your marketplace will not facilitate loan transactions with
borrowers or investors lo cated in the United States.  While your response indicates that
consumption loan borrowers are “highly unlikely to borrow Renminbi for short periods
while overseas,” it remains unclear whether a PRC citizen transiently visiting the United
States would be prohibited  from participating in loan transactions, either as a borrower or
a lender, on your platform via mobile devices or online.  Therefore, we reissue the
comment.

3. Please advise  as to whether you anticipate being a “controlled company,” as defined by
NASDAQ or NYSE rules, as applicable, upon the completion of this offering.  If so,
please revise your disclosure, including providing an appropriate risk factor.

Summary of Historic al Financial Information of our Company, page 13

4. We note you disclose and discuss “gross transaction and service fees” on pages 13, 15, 73
to 76, 78, 79, 87 to 89, 103 and on the Unaudited Interim Consolidated Statements of
Comprehensive Income before “Re venue” line items.  We also note description (4) on
page 15 that this amount represents the revenue line without customer acquisition
incentives.  Please address the following:

 Tell us whether the “transaction and service fees” revenue line item is net of  anything
other than customer acquisition incentives;

 Revise your presentation of the “gross transaction and service fee” and “customer
acquisition incentive” line items to comply with the guidance in ASC 605 -45-50-1;

 Revise the term “gross transaction a nd service fees” throughout your filing, for example
to gross billings, to make it clear that it is not equivalent to revenues or any other
financial metric that is presented in your financial statements; and

 Revise the disclosure throughout your filing t o explain in detail why you believe “gross
transaction and service fees” is a key operating metric that is an important indicator of
your growth and business performance.  Specifically, explain how an investor should
evaluate this disclosure.

Summary C onsolidated Balance Sheet Data, page 14

5. Please revise to disclose cash and restricted cash separately for the periods presented.

6. Please revise to disclose the liabilities from the risk reserve fund guarantee for the periods
presented.

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 3

 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Key Components of Results of Operations, pages 77 -78

7. Please address the following with respect to both your “Lifestyle” and “Consumption”
loans facilitated:

 Provide us wit h a schedule of the fees you charge, the payment terms of those fees,
whether they are fixed or variable by payee (i.e. , investor or borrower);

 If there is no separate fee to opt into the safeguard program for lifestyle loans, tell us
which fee described i n response to the first bullet includes the safeguard program;

 Tell us whether the investor is required to make monthly payments for account
management services if the borrower is delinquent or in default on loan payments;

 Confirm that the 1 -2% and 16%  of principal in the table on page 78 is the average
transaction fee for the loans and tell us how you determine when to charge a higher or
lower transaction fee;

 Since the average interest rate paid by the borrower on a lifestyle loan is 14% in 2015
while the transaction fee is 16%, confirm that the transaction fee is a separate fee from
the interest rate on the loan;

 Confirm that the investor receives its return through the interest rate charged and  tell us
the amount of the interest rate, if any, that  you retain as part of your fees;

 Provide the average annual investment return on consumption loans compared to lifestyle
loans; and

 Include the average account management fees from your response to prior comment 15 in
the table on page 78.

8. We note your disclosure on page 78 that one of the services you provide is assistance to
investors in collecting loan payments from borrowers.  Please tell us whether you or the
investor makes the decisions related to default services and/or remediation pr ocesses.  In
addition, tell us how you considered the guidance in ASC 860 -50 in your determination
that you did not have a servicing asset or servicing liability related to your obligation to
service the loans originated from your platform for your investo rs.

9. You disclose that consumption loans are made either using your proprietary predictive
selection technology or based on the historical repayment records and other behavior of
borrowers on your marketplace.  Please explain in greater detail how the h istorical
repayment records and other behavior of the borrowers on your marketplace impact the

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 4

 issuance of a consumption loan through your platform and provide you sufficient
information to determine whether to include that loan on your platform.

Critica l Accounting Policies

Revenue Recognition, page 83

10. You disclose for both lifestyle and consumption loans that you are not the legal lender or
borrower in the loan origination and repayment process, therefore, you do not record
loans receivable and payab le arising from the loan between the investor and the borrower.
Please provide us a copy of the legal agreements between you, the lender and/or borrower
including the loan and safeguard program agreements.  In addition, explain in detail the
legal rights  or obligations you, the borrower and investor have related to the transactions
and cash flows facilitated through your platform.  As part of this response also address
the following:

 Would your creditors have claim against the loans facilitated through yo ur platform in
bankruptcy in all relevant jurisdictions?

 Does the investor have the legal right to collect funds directly from the borrower when
the borrower is in default?

 Is the investor aware of the credit rating and the APR on every loan they inves t in and if
so, do they have any legal ri ght to the full APR of the loan ?

11. Please tell us amounts paid to the third party payment processors for the servicing of the
borrower payments on facilitated loans in each of the periods presented.

12. We note your revenue recognition policy for “Lifestyle” loans and that you view both the
investor and borrowers as your customer.  You disclose that you allocate funds received
from both the investor and borrower first to the Safeguard Program and then allocate the
remaining to your loan matching and loan repayment service elements.  Please address
the following related to your revenue recognition policy for “Lifestyle” loans:

 If the transaction fee is paid by a different counterparty than the monthly repayment
services, tell us how you determined it was appropriate to combine these contracts and
account for them as a single arrangement under ASC 605;

 Explain in greater detail how you identified the various deliverables once the contracts
were combined and how you determined the best estimated selling price of the elements
of the arrangements.  Ensure your response also addresses the following:

o How you determine the transaction fee for loan matching from borrowers versus
the revenue for loan matching from inve stors;

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 5

o Why you recognize revenue for loan matching and loan repayment over the term
of the loan for investors; and

o If the best estimated selling price is based on the costs incurred to deliver such
services then provide us a breakout of the costs by del iverable and related line
item(s) in the financial statement.

13. We also note your revenue recognition policy for “Consumption” loans and that the
recognition of revenue for the associated fees is contingent upon actual repayment from
the borrower of the l oan.  Please address the following related to your revenue
recognition policy for “Consumption” loans:

 If the transaction fee is paid by a different counterparty than the monthly repayment
services, tell us how you determined it was appropriate to combine  these contracts and
account for them as a single arrangement under ASC 605; and

 Explain in greater detail how you identified the various deliverables once the contracts
were combined and how you determined the best estimated selling price of the elements
of the arrangements.

 Safeguard Program, page 84

14. You disclose that contracts entered into prior to November 2013 did not specify the
amounts to be contributed to the Safeguard Program so no receivables were recorded.
Please revise to describe in det ail any probable future economic benefits as a result of
these past transactions and your contractual legal obligation for repayment of defaulted
loans with respect to the investor protection services for the Safeguard Program funded
prior to November 2013 , at December 31, 2014 and September 30, 2015.  In addition,
explain how you determined the receivable related to the Safeguard Program is
collectible and provide us with an example of how you record the receivable at loan
inception.

15. Please address the fo llowing with regard to the Safeguard Program:

 Tell us how you determine the initial upfron t amount and subsequent amounts ;

 Tell us and disclose whether the subsequent contribution amounts are adjusted to reflect
changes in estimated default rate ;

 If the amounts owed to the individual investors on this loan, exceeds the amount paid into
the Safeguard Program to date for the related loan, address whether the company is liable
for any excess amounts of unpaid interest and principle or is the payout to  investor
limited to the portion of the Safeguard Program c ontributions collected to date ;

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 6

 Clarify in your disclosure whether the restricted cash account related to the Safeguard
Program is available to all investors in the program or whether you legally  obligated or
chose to segregate the funds by investor or based on a first in, first out type of allocation?
For example, if a loan is more than 180 days past due and the restricted cash balance is
equal to the outstanding principal and unpaid interest of  that loan, do you pay the related
investor the remaining restricted cash so the balance goes to $0 even though there are still
investors covered by the Program or does the investor receive only a portion ;

 Disclose whether there is a limit on the period of time in which investors can receive
monies from the safeguard reserve fo r unpaid interest and principal ;

 If there are not sufficient funds, tell us and disclose how payments to investors are made
and determined (e.g. , pro-rata);

 Tell us and disclose w hether the Safeguard Program contributions have to be returned if
there is no loan default; and

 Disclose the actual default rates for each of the periods presented for each of the different
borrower assigned categories.   Disclose how the default rates co mpare to the average
annualized contribution rates to the Safeguard Program for the periods presented.

16. Please revise to include aging and delinquency information for the Lifestyle loans
facilitated for each of the periods presented so that an investor ca n ascertain your
potential liabilities under the safeguard program.  Please also revise to identify the
amount of loans facilitat ed where the investor has op ted into the Safeguard program.

Our Industry

Typical Borrower Acquisition Models, page 99

17. We note your disclosure of the typical borrower acquisition models and investor
acquisition models in China.  We also note you use the proprietary predictive selection
technology model.  Please tell us and revise to disclose which investor acquisition model
you use.

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 7

Our Services, page 108

18. We note your disclosure on page 110 that an investor has the right to select their own
loans, however, almost all investors authorize you to accept loans on their behalf, as long
as the loan fits within the investor’s inves tment profile.  We further note your response to
comment 27 that for consumption loans you have an agreement that allows you to lend
funds from the investor’s account to borrowers for a minimum two -year period.  Please
tell us and revise your “Busine ss” section disclosure to address the following:

 What are the investment profiles you offer and do you have the ability to select both
lifestyle and consumption loans for investors?

 Is there only one investor for every loan facilitated on your platform?

 Does the account management fee charged to investors differ based on whether they or
you select the loan(s) for investment or based on the investment period?

 Do all investors in consumption loans have a two -year minimum investment period?  Are
there mini mum investment periods for investors in lifestyle loans and if so, what is the
minimum investment period?

 What legal rights, if any, does an investor have to withdrawal their cash in an investment
before the maturity date or minimum investment period date ?

 Are there circumstances where you would buy a loan from an investor or pay it off before
maturity date, other than under the Safeguard Program?

Credit Scoring, page 113

19. Please clarify whether the credit scoring system described here and the table of  lifetime
default rate for all loans reaching maturity disclosed on page 114 is for both lifestyle and
consumption loans.  In addition, tell us whether an investor on your platform receives the
information in the table on page 114 for each loan prior to in vesting.

Dr. Zane Wang
China Rapid Finance Limited
February 18 , 2016
Page 8

 Notes to Unaudited Interim Condensed Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies

Note (h) Safeguard Program, page F -39

20. You disclose that at loan inception you record a Safeguard Program payable in
accordance with ASC Topic 460 and the payable is measured at fair value.  You also
state that your obliga