Ant is changing how consumers borrow money from its app

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In December 2020, Beijing issued a guideline for Ant Group to “reform” its business after closing its IPO, which could be the largest initial public offering in history. In the plan, regulators asked Ant to reform its credit business, among other changes that would make it subject to the same set of rules that oversee financial institutions. In other words, Ant can no longer get on with its freewheeling practices by calling itself a “tech” firm.

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Almost a year later, the Alibaba-affiliated fintech powerhouse showed it had nearly completed the restructuring of its popular consumer loan products.

According to the firm, credit loan products contributed about 40% of Ant’s revenue in the six months ended June 2020 catalog filed last year. The two main products are Hubei (Spend), which was launched in 2014 for daily spending by consumers, acting like a virtual credit card. A year later Jibei (lending) was introduced as a credit product for large consumption transactions.


Under the old model, Ant originated loans that were then underwritten by third-party banks and other financial institutions. As of June 2020, according to the firm’s prospectus, approximately 98% of Ant’s credit balance was generated through its platform, which was underwritten or secured by its partner financial institutions.

Jibei has split itself into two brands, users reported earlier this week. Credit lines extended by third-party banks are now called Xinyong Dai (credit loans) on Alipay, Ant’s flagship financial services app. Those provided by Ant’s consumer finance company, which were recently established at the behest of regulators, remain under the Jibei brand.

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Hubei has similarly launched a restructuring, which will show users which loans are given independently by banks and which by the consumer finance firm of Ant. Hubei will focus on “small-ticket” everyday transactions, it said In a Weibo post.

“Following brand differentiation, users applying for credit loan services will be more aware of their credit providers to avoid brand confusion.”

Huabei also noted that it is now storing consumer credit information in a database overseen by China’s central bank. This started Routine after founding its consumer credit company in September, which, like banks, is required to report their credit information to the central bank in China.

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