HANGZHOU -- Alibaba-backed Internet bank MYbank, which will mainly offer services to small businesses and rural clients, opened on Thursday.

MYbank, which is 30 percent-owned by Ant Financial Services Group, has a registered capital of 4 billion yuan ($644 million). Ant Financial is a former subsidiary of Alibaba and is still owned by Alibaba chairman Jack Ma and his colleagues.

Other founders include the Shanghai-based conglomerate Fosun Group, China's largest auto parts supplier Wanxiang Group, and Ningbo Jinrun Asset Management Company.

MYbank is headquartered in the eastern city of Hangzhou.

Ma said the idea of opening a bank first occurred to him in 1992.

"At the time, I wanted to open a translation agency, but it was hard to get a loan as I had no mortgage. Then it occurred to me, if I opened a bank, I could help more people achieve success," he said.

In China, people in rural areas and small-business owners often have difficulty securing credit from state-owned banks due to default concerns.

Yu Shengfa, president of MYbank, said individuals and small businesses may apply for loans of up to 5 million yuan.

Apart from the small business lending inherited from Ant Financial, the bank will also offer cash management, and investment and wealth management services, Yu said.

Yu said he hoped the bank could serve 10 million small businesses and individual entrepreneurs in five years.

The bank will have no physical outlets and all services will rely on data collected from credit history on Taobao, Yu said.

Since 2007, three small lending firms operated by Ant Financial have extended 400 billion yuan of loans to 1.6 million small businesses owners and the non-performing loan ratio is at about 1.5 percent.

Though many see promising prospects for the Internet bank, regulatory hurdles remain, as customers cannot open accounts online.

It was announced last year that five private banks were given permission to open. WeBank, backed by Alibaba's major rival Tencent, opened in December.

Previously, China only had one private bank, China Minsheng Bank, which was founded in 1996. It was the country's first national bank founded by private capital.