China’s central bank is considering licensing a company partly owned by fintech giant Ant Group Co. Ltd. to engage in personal credit reporting. A successful bid will make Qiantang Credit the nation’s third company allowed to conduct the data-intensive business.

The People’s Bank of China (PBOC) said it had received an application from Qiantang Credit to get into the business, according to an official statement (link in Chinese).

Set to be incorporated in the eastern province of Zhejiang, the company’s largest shareholders will be billionaire Jack Ma-owned Ant Group and state-owned Zhejiang Tourism Investment Group Co. Ltd., each with a 35% stake, the statement showed.

Setting up a licensed personal credit reporting company is part of Ant Group’s efforts to follow regulators’ orders to overhaul its multibillion-dollar fintech operations.

The spate of regulatory actions and new rules that has fallen on China’s fintech industry since late last year targets tech groups’ unbridled expansion into financial services. It underscores authorities’ growing concern over potential systemic risks to financial stability as well as data abuse that harms consumer privacy.

Personal credit reporting agencies record individuals’ dealings with financial institutions. The credit data are used by lenders to review customers’ creditworthiness.

Currently, there are two licensed personal credit reporting companies in China: Baihang Credit Co. Ltd. and Pudao Credit Co. Ltd. Both are tasked with pooling information from lending channels outside the traditional financial system, such as online lending. The PBOC also runs its own credit reporting system, the Credit Reference Center, which primarily collects data from banks and other traditional lenders.

Ant Group holds an 8% stake in Baihang Credit through subsidiary Zhima Credit. It remains to be seen how the group will deal with the investment after Qiantang Credit is set up.

Qiantang Credit’s registered capital is set at 1 billion yuan ($157 million), the PBOC statement showed. This is the same as Baihang Credit and Pudao Credit.

If all goes to plan, some of Qiantang Credit’s directors and management will be from its two largest shareholders. Chen Long, a vice general manager of Zhejiang Tourism, will become Qiantang Credit’s chairman, sources with knowledge of the issue told Caixin. Dong Zhanbin, chairman of the board of supervisors at Ant Group subsidiary MYbank, is set to become Qiantang Credit’s president, the statement showed.

Source:  CaixinGlobal.com