SecProbe.io

Mail Stop 4720

July 8 , 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 . 5 to
Draft Registration Statement on Form F -1
Submitted May 6, 2016
  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 su bmitting
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 re sponse.

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

Prospectus Summary, page 1

1. We note your disclosure that  you have facilitated more than 4.7 million loans since
inception.  We further note that a higher figure is presented in the supplemental materials
dated April 2016.  We also note the disclosure presented in footnote 3 on page 5 of the
supplemental materia ls.  Please explain to us the difference in these figures and revise the
summary to clarify when the 4.7 million figure is calculated.  In addition, we note the
presentation of certain  figures for the number of loans that you facilitated, the number of

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 2

 borrow ers and the loan volume, etc.  that do  not appear in the  prospectus.   Please explain
to us why this information is not material information that should also be included in the
prospectus.

Our Company, page 68

2. We note from your disclosure on page 68 and the organization chart on page 70 that
Shanghai Shouhang  Business Management Co., Ltd. is a wholly -owned subsidiary in
China and that substantially all of your business activities are undertaken by this and
other wholly owned s ubsidiaries organized in China.   You disclose that Shanghai
Shouhang  manages the Safeguard Program for the investors on your marketplace and that
your obligation to make payments at any point in time is limited to the amount of the
restricted cash balance.   Please address the following for the Safeguard Program:

 Explain the legal structure of the Safeguard Program and the legal restrictions on
the cash received from the borrower and investor for this Program.   For example,
whose name is on the cash account and what legal rights do you or your
subsidiaries have to the bank account?  Does the Safeguard Program have a legal
obligation to retain all cash attributed to it to fund future defaults even when a
loan is repaid?

 Tell us the compensation you or your subsidiary receive and the costs you incur
related to the Sa feguard Program.   Confirm that the amount debited in the
restricted cash account per borrower or investor payment is net of operating costs
and compensation paid to you.

 Tell us where in the Lifestyle Loan Investor Service Agreement tells the investor
the monthly service fee and Safeguard Program fee charged.

 Whether you still receive a monthly service fee when the payments are made from
the Safeguard Program fund to the lending investor.   If yes, please explain how
the subsequent borrower pay ments, if any, are divided between you, the Investor
and Safeguard Program including the late repayment fee.   In addition, address
how this impacts the legal restriction on the cash related to the Safeguard
Program.

 Confirm that when the Safeguard Program  fully repays an investor for a
delinquent loan that the creditor’s rights of that loan transfer from the investor to
you, if true.  Confirm that when this transfer of creditor’s rights takes place, you
record the loan on your balance sheet, if true.  Expl ain how the Safeguard
Program payment of delinquent interest impacts your interest in the loan and
related accounting.

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 3

 Customer Acquisition Incentives, Page 81

3. We note your disclosure on page 81 that you offer customer acquisition incentives of
approxima tely $20 per new borrower to investors in consumption loans to each first -time
borrower.  You disclose that these incentives are used as a marketing tool to attract new
investors in consumption loans, and also to help you penetrate into the consumption loa n
business and to maximize the portion of the overall fees that the investors allow you to
retain from these borrowers by mitigating their potential investment losses from first -time
borrowers of consumption loans, which generally have higher credit losses  than repeat
borrowers.  Last, you state that other than this incentive, you do not assume any credit
risk for investors.  Please tell us how you considered the fact that you and not the
borrower provide investors with an incentive and it is viewed as a ty pe of credit
protection on loans made to first -time borrowers, in your determination that you did not
have an interest, even a subordinated interest, in the consumption loans that should be
recorded on your balance sheet or considered as a transferred asse t under ASC 860.

4. We also note from the disclosure that you expect to fully recover customer acquisition
incentive payments from recurring transaction and service fees from repeat borrowers of
consumption loans within 15 to 24 months from the financing o f the initial consumption
loans.  Please address the following:

 Tell us the weighted average number of months that you recover your incentive
payments.

 Clarify whether the recovery of cash incentive payments within 15 to 24 months
is based solely on the fees from an individual investor that receives a cash
incentive or whether this recovery period is based on revenues from all
consumption loan investors including those that did not receive a cash incentive
during the period.

 Confirm that you do not con sider lifestyle loan revenue in your cash incentive
accounting analysis even if there are overlapping investors and borrowers.

5. We note in the Consumption Loan Investor Service Agreement provided on March 7,
2016 that the payment and disposal terms of the  cash incentive was pre -populated with an
option.  Please clarify for us whether this term is always pre -populated and if so, how an
investor would go about changing the term to another option.

Revenue Recognition, page 84

6. We note your response to commen t 9 that the investor is your customer with regard to
consumption loans. We also note that the cash flows you receive for the consumption
loans revenue is generated from the borrower through the repayment of the loan.  Please

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 4

 explain in greater detail how you determined that the investor was the customer for your
consumption loans.

7. We note your response to comment  11 that based on Chinese law you are only an agent
for the investor in the Consumption Loan Borrower Agreement and that in the event of
bankruptcy these loans do not form any part of your liquidation assets.  You also state
that borrowers are randomly mat ched to the investors based on the timing and level of
funds available for lending and neither you nor the investor has an option to manually
select borrowers.  Please address the following:

 Confirm that you have developed the technology that underwrites the
consumption loans and matches the borrowers with the investors.  In addition, tell
us whether you are able to modify this technology without the consent of the
investor lenders, including the criteria related to underwriting.  Tell us whether or
not yo u notify your investors of any changes in the technology.

 Tell us whether a consumption loan investor is able to request changes to the
consumption loan underwriting or the criteria of the consumption loans they
invest in at any point during the two -year agreement.

 Describe in detail how you market consumption loans to investors (e.g. , how you
describe your technology, the quality of the consumption loan borrowers and the
rate of return on their two year investment).

Safeguard Program, page 86

8. We note y our response to comment 13  that the amount of early repayment credits issued
from the Safeguard Program during 2014 and 2015 were $0.9 million and $0.6
million.   Please address the following:

 Explain in greater detail how you determined that the legal restrictions related to
the cash received for the Safeguard Program excludes the “performance bonus”
and that your subsidiary was not legally required to pay this “performance bonus”
from their own funds.

 Tell us whether the investor still receives the sa me return on their investment
when a borrower repays the loan early or if the amount is reduced due to the
shorter period of time the funds are lent.   Confirm that early repayment would
also reduce the Company’s total service fees received from the investo r and a
write -off of the remaining receivable due from investor for Safeguard Program, if
true.

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 5

  Tell us the amount of the “performance bonus” paid to the borrower (e.g. is it the
full upfront contribution made by the borrower to the Safeguard Program or o nly
a percentage of those funds).

 Clarify if you record a liability and when it is recorded related to  the obligation
for “the performance bonus .”  If not, explain in detail  why a liability, separate
from the guarantee, is  not recorded .

9. We note your response to comment 16  that you recognize a receivable related to the
investor’s portion of the Safeguard Program fee under  ASC 460 -10-30-2.   This guidance
is referencing a practical expedient for the initial measurement of the liability at fair
value.  Please tell us  the authoritative guidance you relied upon related to recognition of
an asset for the investor’s payments related to the Safeguard Program.   For example, is it
a transfer of an asset under ASC 860, a derivative under ASC 815, or another finan cial
asset in GAAP.  Please provide a basis for your conclusion.  In addition, tell us which
party you receive the contractual right to cash flows from and how you considered this
right in your determination that you are not a participant in the loan.

10. In response to comment 16 you state that the Safeguard Program is recognized at its net
realizable value.   Please clarify what is recognized at net realizable value related to the
Safeguard Program, e.g. , the receivable or liability, and whether it is at net realizable
value at initial recognition or reduced to net realizable value as part of subsequent
measurement.

Notes to Consolidated Financial Statements

2.   Summary of significant accounting policies

(j) Loans receivable, net, page F -10

11. We note your response to comment  26 that the service you provide is mainly to collect
repayments from the borrowers and then wire funds to the investor’s designated account
by sending instructions to the third party payment companies that process the wire
transfer.  You disclose on page 82 that the fees paid to the third party payment processors
for servicing borrower payments totaled $0.3 million for 2015.  You also disclose on
page 125 that you provide payment management services for delinquent loans, whi ch it is
not clear whether the cost of this service is included in the $0.3 million.  Lastly, we note
your response to comment 6 that your service fee revenue for 2015 was $6.9
million.  Since total service fee revenue significantly exceeds your main cost for
providing such service, we continue to question how you determined that as the servicer
you do not have a servicing asset or l iability under ASC 860 -50-30.  Please explain in
greater detail the “other market players” you looked to determin e the fair market rate for
servicing, i.e. , names and types of companies, and tell us the nature of and total servicing
expenses, you incurred in 2015 related to servicing of the loans on your

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 6

 platform.   However, if you determine that you do have a servicin g asset or liability under
ASC 860 -50-30 please  tell us the value of it as of December 31, 2015 .

(n) Safeguard Program, page F -12

12. We note your response to comment  27 that in determining the fair value of the guarantee
liability, you believe a market participant would consider how the “cap” related to the
Safeguard Program is legally structured and how it may impact any individual guarantee
by considering current availability of funds, including receivables from current
contractual arrangements in place.   Please e xplain in greater detail how the Company
determined that the fair value should include the total contractual cash flows owed by
investors at the date of measurement considering the cash flows are received over a
period of time and are contingent on borrowe r repayment.   In addition, tell us the risk
premiums or discounts, if any, the Company consider in determining the fair value of the
guarantee.

13. We also note that your profit margin estimate for the fair value of the Safeguard Program
is based on third -party service providers that arrange fund transfers and maintain a record
of the cash inflows and outflows like payment companies, banks, trustees or
brokers.   Please explain in greater detail how the legal structure and restrictions related to
the Safeguard Program compare with the types of accounts serviced by these third -parties
including whether these other providers retain the cash if the account is wound down.
(x) Segment reporting, page F -17
14. We note your response to comment  28 and that the CFO assists t he CEO in allocating
lending capital resources to lif estyle loans, consumption loans  and micro -lending loans.
In addition, we note that the CODM on a monthly basis receives the lending capital
movement and the following information by loan type: loan vol ume, revenue, gross
billings on transaction and service fees, number of borrowers, risk management policy
and default rate.  Please tell us what information the CEO reviews in order to determine
the allocation of lending capital resources to the various ty pes of lending and why you do
believe this information is not discrete financial information.

15. Please tell us how you considered the guidance in ASC 280 -10-50-40 in determining not
to disclose revenues separately for lifestyle loans, consumption loans an d micro -lending
loans.

Dr. Zane Wang
China Rapid Finance Limited
July 8 , 2016
Page 7

 You may cont act Marc Thomas at (202) 551 -3452  or Gus Rodriguez at (202) 551 -3752  if
you have questions regarding comments on the financial statements and related matters.  Please
contact David Lin at ( 202) 551 -3552 or me at (202) 551-3391  with any other questions.

Sincerely,

 /s/ Erin E. Martin

Erin E. Martin
Special Counsel
Office of Financial Services

cc: Kerry Shen
Alan Seem, Esq.