Beijing wants to break up Alipay, the hugely popular payments app owned by Jack Ma Yun’s Ant Group, and create a separate app for the company’s highly profitable loans business, the Financial Times reported.
The plan will also see Ant turn over user data that underpins its lending decisions to a new credit scoring joint-venture that will be partly state-owned, the FT reported, citing two insiders
State-backed firms are set to take a sizable stake in Ant’s credit-scoring joint venture for the first time, three people told Reuters last week.
The partners plan to establish a personal credit-scoring firm wherein Ant and Zhejiang Tourism Investment Group – a state-owned company in Ant’s home province, will each own 35 percent. Other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5 percent, said one of the sources.
It is believed that the fintech group will have a big say on the operation of the new joint venture, but the new set-up will ensure Ant listens to Beijing when it comes to critical decision-making, a former People’s Bank of China official told the paper.
Ant will not be China’s only online lender affected by the new rules.
In April, regulators asked Ant to conduct a sweeping overhaul, including turning Ant itself into a financial holding firm, and folding its two lucrative micro-loan businesses Jiebei, which makes small unsecured loans, and Huabei, a virtual credit card, into the new consumer finance firm.