China c.bank nods to set up credit-scoring JV backed by Ant, state-owned enterprises

A man walks past an Ant Group logo at the World Artificial Intelligence Conference (WAIC) in Shanghai, China, July 8, 2021. REUTERS/Yilei Sun

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BEIJING, Nov. 26 (Reuters) – China’s central bank on Friday said it had accepted the application to set up a personal credit scoring joint venture backed by Alibaba’s (9988.HK) fintech affiliate Ant Group and other companies.

The new venture, Qiantang Credit Rating Co Ltd, will become the third personal credit rating company in China if it is officially approved by regulators.

It will be registered in Hangzhou, Zhejiang Province, with a capital of 1 billion yuan ($156.50 million), the central bank said. The city is where Alibaba and Ant are located.

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Ant and the state-sponsored Zhejiang Tourism Investment Group Co Ltd [RIC:RIC:ZJGVTT.UL] would each own 35% of the company, according to a statement from the People’s Bank of China (PBOC).

Other state-backed partners, including Hangzhou Finance and Investment Group and Zhejiang Electronic Port, are said to hold 6.5% each.

Transfar Group, a non-state-backed shareholder, would hold 7%. The remaining 10% would be held by a private equity firm.

The venture, in which Chinese state-owned companies will acquire major stakes, is part of Ant’s major overhaul of the company at the behest of regulators who abruptly ended the blockbuster initial public offering (IPO) last November.

The government has insisted that state-backed companies exert more influence over high-growth but lightly regulated companies in the new economy, Reuters reports. read more

It also serves as the central bank’s long-standing effort to link loan data between various online lending platforms and tighten controls on the sharing of credit information to prevent over-borrowing and fraud.

Before Qiantang, in 2018 the central bank had approved Baihang Credit, China’s first licensed personal credit bureau with nine co-invested parties, including credit rating agencies Ant and Tencent Holdings (0700.HK).

It granted a second such approval to set up Pudao Credit Rating in December 2020, a venture between the investment arm of the Beijing government and subsidiaries of e-commerce giant JD.com (9618.HK) and smartphone maker Xiaomi Corp (1810.HK) ).

($1 = 6.3901 Chinese Yuan)

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Reporting by Cheng Leng, Zhang Yan and Ryan Woo; Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.

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