Ant Group applies to China’s central bank to set up personal-credit scoring joint venture with state-backed partners
- The personal-credit scoring joint venture, Qiantang Credit, will be 35 per cent owned by a unit of Ant Group
- Tech firms are hiving off their consumer-credit data units in joint ventures with state-backed entities, which could help allay regulators’ concerns about their control over personal data
Qiantang Credit, which will have 1 billion yuan (US$157 million) in registered capital, will be 35 per cent each owned by a unit of Ant Group and Zhejiang Tourism, according to a notice published by the People’s Bank of China (PBOC) on its website on Friday.
The rest will be held by Zhejiang-based conglomerate Transfar Group, state-owned Hangzhou Financial Investment Group, trade information portal operator Zhejiang Electronic Port and Hangzhou Xishu.
The PBOC said it will accept public feedback on the venture’s application for a business licence until December 2, following which it will give its decision.
Ant Group declined to comment.
If approved, the credit-scoring agency will be the third private company in mainland China to provide credit reporting services, that underpin lenders’ lending decisions. The last licence was granted in December 2020 to Pudao Credit Rating, which is backed by e-commerce major JD.com, smartphone giant Xiaomi and artificial intelligence giant Megvii.
Over the past year, Beijing has made it a top priority to rein in the country’s tech giants’ influence on the use, storage and management of personal data collected on their platforms. The tech firms are hiving off their consumer-credit data units in joint ventures, with state-backed entities holding stakes in these businesses.
Such a move could ally regulators’ concerns over personal data protection.
“Some [companies] collect data without permission, [and are] leaking customer data, so the strengthening of personal data protection is an urgent matter,” Yi said. “We are cracking down on excessive collection of consumer data, and unfair practices that require customers to hand over data in exchange for financial services.”
A key plank of Ant’s restructuring plan has seen the Alipay operator moving its Jiebei and Huabei lending services, with the latter akin to buy-now-pay-later loans, to Chongqing Ant Consumer Finance, according to a source familiar with the situation. The new company will also offer consumer loans jointly funded by itself and other banks.
Earlier in April, the PBOC and other financial regulators directed Ant to correct “improper competitive behaviour” surrounding Alipay, break an “information monopoly” over data collection and end “inappropriate” links between Alipay and its consumer-lending operations.