The People’s Bank of China (PBOC) has given green light to firms backed by Alibaba, Tencent and six other companies to launch customer credit information services. The big win is expected to strengthen the Internet conglomerates’ financial business. PBOC said in a statement that it has given licenses to eight companies in the first batch, reports South China Morning Post.
Launch credit data services within six months, PBOC tells firms
PBOC has given these companies six months to prepare their systems and services. That means Alibaba, Tencent and others have only six months to launch the credit bureaus “according to all the rules and regulations required.” PBOC said that this step was necessary to develop a credit data services to boost the foundation of the economy.
Among the winners was Sesame Credit Management, an arm of Alibaba’s Ant Financial Services Group. Ant Financial is controlled by Alibaba founder Jack Ma. Another two firms are Tencent Credit Reporting Co and Ping An Insurance Group. The other five are local technology and financial companies: Pengyuan Credit Services, China Chengxin Credit Information, IntelliCredit, Blue Focus, and Yin Zhi Jie.
Sesame to provide credit ratings for Alibaba users
The credit services allow eight firms to collect data from individuals in their online payment records. It will serve as proof of their personal credit. Individuals can pay these firms to get their credit records and use them to apply for loans. It’s the first time the Chinese central bank has revealed the names of businesses that will likely be the first to run credit services businesses.
China allowed private companies to do so in 2013 in an attempt to diversify services. Credit services in the country are still dependent on the government band, and are limited to basic inquiries about the borrowers’ credit history. Alibaba’s Sesame Credit Management said it could provide credit ratings for individuals as well as businesses that use Alibaba’s services. Alibaba has access to data of more than 300 million individual users and 37 million businesses.