Ant Group to Differentiate Between Borrowing From Company, Outside Lenders

Ant Group has begun telling customers whether they’re 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) report Wednesday (Nov. 24).

Ant has been trying to revamp its business since Chinese regulators curtailed its would-be blockbuster initial public offering (IPO) last year, fearing that the company was growing too powerful in its wide influence. WSJ cites Ant’s consumer credit services as a substantial reason for that.

As part of this overhaul, in June, Ant made a new consumer-finance company along with several other companies, and has begun to fold the credit business into this new entity.

Ant says the new system will help to service more users.

WSJ reports that Ant funded 2% of the 1.73 trillion yuan ($270 billion) of loans as of June 2020, which is the latest data available. The rest came from banks, trust companies and asset-backed securities.

This month, Ant has started differentiating between its Huabei and Jiebei products based on the source of funding.

The loans funded wholly or partially by Ant will keep the Huabei and Jiebei brand names, while the credit services from other institutions will come with a label of Xinyonggou, meaning “buy with credit.”

Consumer loans funded by other companies will be called Xinyongdai, or “credit loans.” In a letter to users, Ant said Xinyonggou would be a better deal because it has a larger credit line than Huabei.

In September, Ant reported that it would be turning over credit card data to the Chinese government to be included in a federal credit reporting system. On social media, Huabei said that it was “advancing with its orderly inclusion” into the database.

Huabei will only let users who authorize sharing credit info with the Peoples’ Bank of China (PBOC) to use the service.

See also: Ant to Turn Over Consumer Credit Info to Chinese Government