Ant Group separates loan services from partner loans


Consumers must give consent for their credit data to be shared with the PBOC to use Ant Group’s loan services.

Ant Group has reportedly started to separate its consumer loan brand Huabei from lending services provided by partners on its platform, Caixin reported.

The exercise is part of Ant Group’s efforts to comply with stricter regulatory requirements for fintech platforms since Chinese authorities abruptly halted the $ 34.5 billion share sale plan of the company a year ago.

In February of this year, the CBIRC (China Banking and Insurance Regulatory Commission) set an overall limit on online loans issued by banks in cooperation with third parties as a percentage of their total credit and class net capital. 1.

In addition, banks were required to contribute a maximum of 70 percent of the capital for any joint loan, while their partners were required to contribute at least 30 percent.

Regulators have ordered Ant Group to focus on its role as a payment service provider, remove other financial products from its platform, and decouple them from Alipay’s payment infrastructure.

Ant Group is also no longer authorized to allow other financial institutions to issue loans through its Jiebei and Huabei consumer lending platforms.

Previously, Ant Group matched users in Huabei and Jiebei with the banks that provided the credit, while taking a percentage of the fees. The model raised concerns about the potential risks posed to the financial system, as banks were to bear most of the credit risk.

Huabei, which means “just to spend,” works like a virtual credit card that consumers can use to make purchases online and in stores. Jiebei, which means “just borrow,” provides unsecured loans for up to 12 months which are usually paid off in installments.

Jiebei is designed for larger consumer transactions by users who have already developed a credit history on the Ant Group platform or who are eligible for Huabei.

Ant Group’s new consumer credit unit, Chongqing Ant Consumer Finance, will continue to provide consumer credit services under the Huabei brand, but consumer loans issued by its partners will be provided under a new category called Xinyonggou. .

In early November, Ant Group made a similar move for its Jiebei service, removing lending services provided by partners on its platform to differentiate them from its own financial services. Loans issued by partners use the Xinyongdai label, while those issued by Ant Group will remain under its Jiebei brand.

After the restructuring, the credit products displayed in users’ Alipay accounts will have five categories: petty cash, Huabei, Xinyonggou, Jiebei and Xinyongdai. Petty cash is typically a CNY 500 interest-free loan that borrowers have to pay back in seven days.

In September, Ant Group said it began providing consumer credit data from its own private credit scoring system to the People’s Bank of China (PBOC) financial credit information database.

Ant Group has announced that it will lower borrowing limits for users with excess debt, based on information in the PBOC’s credit database. Customers who do not allow credit data sharing with the PBOC will not be able to use Huabei’s service, Caixin said.


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