(Yicai Global) Sept. 19 -- Wuxi Xishang Bank, which positions itself as an Internet of Things-based financial institution, has become the 19th company in China to obtain a private banking license in a sector dominated by Tencent-backed WeBank.

Apparel maker Jiangsu Hongdou Industrial and seven other firms will set up the bank with CNY2 billion (USD282 million) in registered capital, the founding partner, which is shelling out for a 5 percent stake, said in a statement on Sept. 17. It expects the bank will be up and running within six months.

China began piloting private banks in 2014 and approved five institutions that year. It dished out another 12 licenses through 2016 but refused to greenlight any other lenders until May this year, when it gave the nod to Jiangxi Yumin Bank. Henan province-based Bank of Huamao is also gearing up to secure one of the elusive permits.

Those that have received permits have had varying success in the field. WeBank has CNY220 billion (USD31 billion) in assets, or 35 percent of all those held by private banks in China. Second-place Zhejiang E-Commerce Bank has CNY120 billion, giving the pair a combined market share of more than half.

Xishang hopes to stand out from the crowd by using IOT technologies to provide financial services for the real economy, particularly small-, medium- and micro-sized enterprises and innovative technology firms.

Its biggest shareholder will be Hongdou Industrial's parent Hongdou Group, which will take a quarter of all equity, and Chengxin Industrial Group will pick up 24 percent to be Xishang's second-largest investor. The remaining investors will all hold less than 10 percent: Suzhou Kelida Building & Decoration, Nanjing Dele Science and Technology, Xingda Investment Group, Jiangsu Shuangxiang Group, and World Sensing Net Wuxi.

Editor: James Boynton