Alibaba-Backed Ant To Share Consumer Credit Data With Chinese Central Bank

Alibaba Group Holding BABA subsidiary Ant Group will share credit data of its consumer lending business Huabei with China’s central bank as part of a regulatory move by Beijing to tighten its hold on the financial technology sector, CNBC reported on Thursday, citing a company statement.

What Happened: Ant Group’s micro-loan service known as Huabei will share the date of account set up and the amount in the credit line and status of repayment with the People’s Bank of China. 

Chinese regulators ordered a restructuring of Ant Group after the company’s plans for a blockbuster $37 billion listing in November was suspended.

See Also: Alibaba's Ant Secures Regulatory Approval For Consumer Finance Firm In China

The company has since been undergoing a restructuring to turn itself into a financial holding firm that falls under the purview of the Chinese central bank. Chinese regulators have acted on the belief that companies like Ant were acting as financial institutions but haven't been regulated like them.

Why It Matters: About 500 million people used services of Ant subsidiaries Huabei and short-term consumer loan provider Jiebei in the 12 months leading to June 30, 2020, the fintech giant said in its IPO prospectus.

Chinese tech platforms have for years resisted sharing data, a key asset that helps them run operations, manage risk and draw new customers, as per Reuters.

Price Action: Baba shares closed 1.14% higher at $151.89 on Wednesday.