Ant Group has started telling clients if they are borrowing from the company or from an outside lender, as founder Jack Ma continues his attempts to follow Chinese regulations, according to a Wall Street Journal (WSJ) article on Wednesday, November 24. .
Ant has been trying to revamp its business since Chinese regulators reduced its potential blockbuster initial public offering (IPO) last year, fearing the company would become too powerful in its broad influence. WSJ cites Ant’s consumer credit services as an important reason for this.
As part of this overhaul, in June Ant created a new consumer finance company with several other companies and began to integrate the credit business into this new entity.
Ant says the new system will help serve more users.
The WSJ reports that Ant financed 2% of the 1.73 trillion yuan ($ 270 billion) in loans in June 2020, which is the latest available data. The rest came from banks, trust companies and asset-backed securities.
This month, Ant started to differentiate its Huabei and Jiebei products based on funding source.
Loans financed in whole or in part by Ant will retain the Huabei and Jiebei brands, while credit departments of other institutions will carry the Xinyonggou label, which means âbuy on creditâ.
Consumer loans financed by other companies will be called Xinyongdai, or âcredit loansâ. In a letter to users, Ant said Xinyonggou would be a better deal because it has a larger line of credit than Huabei.
In September, Ant announced that it would pass credit card data to the Chinese government for inclusion in a federal credit reporting system. On social media, Huabei said he was “moving forward with his orderly inclusion” in the database.
Huabei will only allow users who allow credit information sharing with the People’s Bank of China (PBOC) to use the service.
See also: Ant to hand over consumer credit information to Chinese government