In December 2020, the Chinese government provided Ant Group with guidelines for “correcting” its business after discontinuing an IPO that could be the largest initial public offering in history. .. In it, regulators have asked Ant to review its credit business, etc., and have been subject to the same set of regulations that supervise financial institutions. In other words, Ant can no longer be bohemian in what it calls a “tech” company.
About a year later, Alibaba-affiliated fintech company has shown that it has almost completed the restructuring of its popular consumer credit products.
According to the company’s prospectus submitted in 2020, credit loan products accounted for nearly 40% of Ant’s revenue in the six months to June 2020. The two main products are the Huabei, launched in 2014 for consumer spending, which acts like a virtual credit card, and a year later, on a larger scale. It is “Jiebei” introduced as a credit product for consumer transactions.
In the old model, the loan originated by Ant was taken over by a third-party financial institution such as a bank. As of June 2020, about 98% of Ant’s credit balance created through the platform was underwritten or securitized by partner financial institutions, according to the company’s prospectus.
Jiebei has been split into two brands, users reported earlier this week. In Ant’s flagship financial services app, Alipay, credit lines offered by third-party banks are called “Xinyong Dai.” Meanwhile, the credit line provided by Ant’s consumer finance company, which was established at the request of regulatory agencies, remains the “Jiebei” brand.
Huabei has also begun a restructuring to show users which loans are offered independently of banks and which loans are offered by Ant’s consumer finance companies. Huabei said in a post to Weibo that he will focus on everyday “small amount” transactions.
“With brand differentiation, users applying for credit loan services can get more information about credit providers to avoid brand confusion,” he said.
Huabei also mentions submitting consumer credit information to a database supervised by the People’s Bank of China (Central Bank). The company started this routine after establishing a consumer credit company in September. Consumer credit companies, like banks, need to report credit valuation data to central banks.
Image Credit: Ant Group
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(Sentence: Rita Liao, Translation: Aya Nakazato)