Consumer lending service Ant Group Co. will turn over all of its credit data to Chinese government officials for inclusion in a federal credit reporting system, according to a report on Wednesday (Sept. 22) in The Wall Street Journal.
Huabei, Ant’s virtual credit card service, said on social media that it is “advancing with its orderly inclusion into the financial credit information database held by the Credit Reference Center of the (People’s Bank of China),” referring to China’s central bank. (“Huabei” translates to “just spend” in Mandarin.)
“Inclusion of Huabei credit information into the PBOC’s credit reporting system will help enhance the comprehensiveness of users’ credit reporting information,” Huabei said in the post. “We recommend that users continue to maintain rational use of Huabei, spend within their means and make appropriate use of credit tools.”
Huabei will only allow users who authorize sharing their credit info with PBOC to use its service. The central bank’s database will retain account setup dates, credit line amounts, repayment status and other information as part of monthly reports from Huabei to PBOC, according to the WSJ report, but the company won’t offer up specific transaction information.
Ant’s customer data and its proprietary algorithms had helped the company grow both before and after its failed IPO in November, which fell apart because of concern in Beijing about the company’s growth and lack of regulatory oversight.
Ant operates payment and lifestyle app Alipay, which is used by more than one billion people in China. It had partnered with commercial banks on loans for about 500 million people, but the loans had about $263 billion in outstanding balances as of June 30, 2020, according to the WSJ report.
Ant recently established a consumer finance subsidiary to its lending division, Chongqing Ant Consumer Finance Co.
Related news: As Ant Reconfigures Loan Business, China’s SMBs Could See Credit Headwinds
The Chinese government is forcing Alipay to create a separate app that would focus on Ant’s lending business, following earlier directives that the company’s lending businesses be separated from Ant’s main operations and that the company’s two lending operations — tied to traditional credit cards and to small, unsecured loans — would be consolidated into a new company.