Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 2024

China wants a say in fintech’s future with new credit ratings license

China wants a say in fintech’s future with new credit ratings license

The shareholding composition of the second license, following the first license in 2018 to Baihang Credit, underscores the financial regulators’ increased scrutiny of consumer credit and online loans, especially those granted to small and medium-sized enterprises.

China’s central bank has granted the country’s second license for collecting personal credit ratings to a venture between a state-owned enterprise and two internet firms, in a move that hints at how the government wants a say in how technology interacts with finance and societal risk in the world’s second-largest economy.

Pudao Credit, a 1 billion yuan (US$152.8 million) venture that is 35 per cent owned by Beijing Financial Holdings Group of the municipal government of the Chinese capital city, will be allowed to develop a system to provide personal credit ratings for the banking and financial services industry, according to a statement by the People’s Bank of China. JD Digits, the fintech unit of the e-commerce platform JD.com,will own 25 per cent of Pudao, while smartphone maker Xiaomi will own 17.5 per cent according to an earlier statement.

Personal credit rating firms collect data from financial institutions, and share the data with and provide risk assessment reports to entities that sign up for the service. On top of the financial data, such agencies can also access other data like travel and phone records that are deemed as alternative financial information.

Beijing-based Pudao would augment the first license granted in 2018 to Baihang Credit, a Shenzhen-based consortium comprising the nation’s fintech association with eight credit rating agencies and technology companies including those controlled by Alibaba Group Holding’s affiliate Ant Group and Tencent Holdings. The shareholding composition of the second license underscores the financial regulators’ increased scrutiny of consumer credit
and online loans, especially those granted to small and medium-sized enterprises.


Headquarters of the People's Bank of China (PBOC) in Beijing on September 28, 2018.


The PBOC revised a rule governing online lending last month, requiring stricter capital adequacy and setting a cap on the amount of such loans that be extended to individual borrowers. Just days after, the world’s largest fintech company Ant Group had to suspend its record-breaking US$37 billion initial
public offering in Shanghai and Hong Kong to comply with the change of the regulatory framework.

China’s consumer credit market will almost double to 24 trillion yuan by 2025, according to Oliver Wyman. Ant Group has the largest share of the market with 16 per cent, followed by Tencent-backed WeBank with less than 5 per cent, according to the data.

Baihang credit has financial data on 85 million people, obtained from more than 1,700 financial institutions, and has a customer base of almost 1,000 companies, according to its latest report.

Personal credit ratings will also be a boon for Chinese banks whose dud loans have been spiking after advancing a record amount of new loans this year to battle the coronavirus pandemic. The overall bad loan ratio rose to the highest since 2009 by the end of the third quarter, as the worldwide coronavirus pandemic weighed on tourism-related businesses and personal consumption.

Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×