China’s first private credit-scoring company started operations in the southern city of Shenzhen, and will be able to collect and store personal credit information as well as providing credit reports and credit scores, according to China’s news agency Xinhua.
Baihang Credit Scoring was approved by China’s central bank in January and has a registered capital of 1 billion yuan ($156.56 million). Its shareholders include the National Internet Finance Association of China, Tencent (0700.HK) and Sesame Credit, backed by Alibaba (BABA.N).
“Private credit-scoring companies can supplement the state-run database in providing inclusive financial services,” Xinhua quoted Dong Ximiao, a senior researcher at the Renmin University of China, as saying.
Baihang was not immediately reachable for comment. China’s existing, centralized credit scoring system, the Credit Reference Center, only covers around 300 million people out of around 800 million potential borrowers. That creates a blind spot of some half a billion borrowers beyond Beijing’s credit network. By contrast, almost all adults in the United States have a credit score. This in turn has sparked a push by China’s big technology companies to develop credit-scoring platforms.