Companies backed by China's Internet conglomerates Alibaba Group Holding Ltd and Tencent Holdings Ltd have been given the green light to provide consumer credit information services, a move that is expected to not only strengthen the two companies' finance business but also give a strong boost to other entities they own.
The People's Bank of China, the central bank, said in a statement on Monday that it had given Sesame Credit Management, a business unit under Alibaba's Ant Financial Service Group, and Tencent Credit Reporting Co and six other companies six months to open their consumer credit information business.
The Shenzhen-headquartered Tencent said in an e-mail to China Daily on Tuesday that by expanding into the consumer credit reporting sector, it wants to help financial organizations improve their risk management abilities, enable more people to get easy loans and raise credit awareness, especially among young people.
The Hangzhou-based Ant Financial said in a statement that with the rapid development of the Internet, people's behavior can be tracked and documented throughout the day.
"Compared with data from traditional credit information services, data processed by Internet credit agencies cover a wider spectrum," said Yu Wujie, chief credit data officer with Ant Financial, adding the data Sesame Credit Management uses range from consumers' online shopping records to online financial behavior like credit card repayments and money transfers.
Ma Tao, an Internet finance analyst at consultancy firm Analysys International, said that by going into credit record sector, both Alibaba and Tencent can give their finance business a boost.
"Alibaba has already laid a solid foundation in the finance sector by spinning off Ant Financial, which has China's largest e-payment solution provider and offers micro loans to merchants on the group's online platforms," said Ma.
"Tencent seems to be lagging Alibaba in financial service offerings. However, WeBank, one of China's first private lenders and an online-based bank, which is majority-owned by Tencent, is set to start operation soon. The bank's focus is to offer micro loans to consumers and small and medium-sized enterprises," he said,
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