China central bank gives go-ahead to credit-scoring venture backed by Ant, state firms

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

Qiantang Credit Rating Co Ltd will become the third personal credit scoring firm in China if 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 based.

Ant and the state-backed Zhejiang Tourism Investment Group Co Ltd will each own 35% of the venture, according to a statement by the People’s Bank of China (PBOC).

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

Transfar Group, a non-state-backed shareholder, will hold 7%, while the remaining 10% will be held by Hangzhou Xishu.

Hangzhou Xishu is an entity that operates employee stock ownership plans, a source with knowledge of the matter said.

The set-up of the venture is part of Ant’s sweeping business revamp ordered by regulators who put a sudden stop to its blockbuster initial public offering (IPO) last November.

The government has pushed for state-backed firms to exert more influence over fast-growing but lightly regulated new-economy businesses, Reuters has reported.

It also serves as the central bank’s year-long attempt to link loan data among different online lending platforms, and tighten controls in credit information sharing to prevent over-borrowing and fraud.

Before Qiantang, the central bank had approved Baihang Credit in 2018, China’s first licensed personal credit agency with nine parties co-invested, including credit rating units of Ant and Tencent Holdings.

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 and smartphone maker Xiaomi Corp.

($1 = 6.3901 Chinese yuan)

(Reporting by Cheng Leng, Zhang Yan, Ryan Woo and Julie Zhu; Editing by Edmund Blair and Louise Heavens)