More than 600 entities have been connected with Baihang Credit’s personal credit database, said Chen Yulu, deputy governor of People’s Bank of China (PBOC), at a recent press conference during the Two Sessions meeting. The progress appears well-received; one analyst cited in the news article said Baihang’s database would help internet finance firms “improve social management efficiency.” Another analyst said establishing a credit system will “bring great growth prospects to the entities.”
China’s Internet financial institutions will include the credit information system, said Chen Yulu, deputy governor of the People’s Bank of China. As an effective supplement to traditional banks, online finance has boomed in China in recent years but it suffers from risks such as fraud and debt evasion.
Insiders say the move guarantees healthy and orderly development of the industry by preventing malicious lending, cutting transaction costs, and safeguarding the rights of lenders in peer-to-peer loans through online platforms. Chen said China’s current credit system is moving ahead on two wheels, driven by both the government and the market.
At present, there are 125 companies and 97 institutions in the field of personal credit information, most of which are funded by private capital, reported Securities Times newspaper. Meanwhile, the People’s Bank of China approved Baihang Credit Scoring, which is backed by Alibaba and Tencent among others, and has registered capital of one billion yuan ($149 million).