China’s banking and insurance coverage regulator stated Thursday that it had accredited an software by Ant Group Co. to arrange a consumer-finance firm, the primary milestone within the financial-technology large’s restructuring of its business.
Ant will maintain a 50% stake within the new entity, registered within the Southwestern municipality of Chongqing, with the remainder held by six different shareholders. The corporate, Chongqing Ant Client Finance Co., is licensed to conduct shopper lending and different operations. It’s going to maintain Ant credit score companies Huabei and Jiebei, which have been utilized by nearly half a billion individuals in China.
Ant, a mobile-payments firm managed by billionaire
has been pressured to overtake its enterprise after Chinese language authorities canceled its initial public offering in November.
One of many areas that drew Beijing’s ire was Ant’s colossal consumer-lending enterprise. On the finish of June final yr, individuals who had borrowed cash from Ant’s platforms had a complete of the equal of $271.1 billion in excellent loans.
Ant originated many of the loans in partnership with industrial banks, which offered the majority of the funding for the debt. Most of the loans have been taken out by younger individuals with out established credit score histories. Regulators frowned upon Ant’s actions as a result of they inspired some individuals to borrow and spend beyond their means, and created dangers for the banks that provided funds for the loans.
Write to Jing Yang at Jing.Yang@wsj.com
Copyright ©2020 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8