Ant Team to share buyer credit history information with China’s central financial institution

GUANGZHOU, China — Ant Group will share credit history info from its buyer lending business enterprise with China’s central bank as aspect of an overhaul of the fintech big.

Huabei is a client financial loan products below Ant Group. Info from that lending products will be fed into the economical credit information databases held by the People’s Lender of China (PBOC), Ant stated in a statement Wednesday.

Details including date of account set up, quantity in the credit line and position of repayment will be delivered to the central lender. People will need to authorize this. Certain info such as information about time of purchases or products becoming bought will not be handed above to the PBOC.

Ant Team, which is controlled by billionaire Alibaba founder Jack Ma, had its blockbuster first general public supplying suspended in November more than regulatory issues.

Ant’s lending business labored on a design in which it matched up borrowers to lenders, this sort of as financial institutions, but the company did not underwrite these loans. As an alternative, banks bore most of the danger.

This anxious regulators who considered companies like Ant had been acting like financial institutions but not becoming regulated like them.

Chinese regulators requested a restructuring of Ant Team. In June, the firm was supplied the green gentle to function a client finance business enterprise with outdoors shareholders. This business residences its Huabei and Jiebei personal loan products and is called Chongqing Ant Purchaser Finance Co. Ant will have to partly underwrite more of these loans.

Ant Group is presently in the approach of getting a monetary holding firm which will be overseen by the PBOC and other regulators.

A symbol of Ant Group is pictured at the headquarters of the enterprise, an affiliate of Alibaba, in Hangzhou, Zhejiang province, China Oct 29, 2020.

Aly Tune | Reuters

The knowledge-sharing prerequisites with the PBOC delivers Ant Team in line with other economical institutions in the lending house which are essential to do the same thing.

Ant Group explained some people can presently glimpse up the Huabei-similar records in their credit stories with the central lender.

The corporation seems to be to assuage fears that the sharing of users’ credit details from Huabei could have an affect on their future capacity to get financial loans.

“A comprehensive and right established of credit records will empower economical establishments to greater fully grasp users’ creditworthiness and to much better provide them,” Ant Group said in a statement.

In my check out, this implies the intent is to allow for Ant to continue its enterprise but underneath regulatory purview and principles.

“Consequently, underneath general situations and with the typical use of Huabei and well timed repayments, the use of other economic services these as bank loan apps will not be impacted.”

Kevin Kwek, controlling director and senior analyst at Bernstein, reported the credit data-sharing agreement with the central lender clears “major” regulatory uncertainty about Ant Team.

“Sharing of facts of class erodes Ant’s edge, but performing so will allow them to acquire regulatory blessings, such as getting the client finance license,” Kwek advised CNBC.

“In my see, this implies the intent is to allow for Ant to go on its business enterprise but beneath regulatory purview and principles, and if it allows the broader purchaser credit score bureau agenda. It is important to take note that Ant will carry on to be dominant as a really huge distributor offered its user base, even if it now has to share some data.”

About the author: Alan Leonard

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